Mitigation is one of the most important obligations imposed by law on dismissed employees. Failure to mitigate could have significant negative impact on the award of damages. Many dismissed employees are unclear about this duty and end up compromising their valid case unnecessarily. This lecture helps dismissed employees understand this obligation in simple terms.
Click here to watch the Youtube video:
OR: read the machine-based transcript below, which may contain some errors.
Welcome everyone. This is Amer Mushtaq from you counsel. Today we will talk about obligation to mitigate in employment law circumstances. It is an essential obligation in most of the employment law cases and it's a duty on the employee, the terminated employee, to try to mitigate his or her damages. so we'll talk about it and explain what does it mean to mitigate and what is it that the employee needs to do.
Before we begin, we will provide you with our usual disclaimer that this course is not legal advice if you have any specific questions please contact your lawyer or paralegal.
Let's begin with mitigation. What does it mean. And we'll talk about mitigation and in its broad sense mitigation is essentially the reasonable action that a party, the aggrieved party, the party who suffered any loss, must take reasonable action to minimize the loss that it has suffered.
Let's explain that by way of an example which will make it easier. Say that you had a car and you were you were trying to sell that car you were leaving country or you were transferred to another province and you had to sell that car and there was a time crunch that you needed to sell that car. So you get into a sales contract with someone who is interested in buying your car you come to an agreement and the person is willing to buy a car. Let's say for twenty thousand dollars. You have set a date and time when the person will come and give you a check for twenty thousand dollars and take away the car. And based on that you refuse any other offers that the other parties that may be interested in buying the car from you and you turn them away because you have already entered into a contract. But for some reason, the person who has entered into contract with you does not fulfill the contract, does not pay you the money, so basically ignores the contract completely.
So if that's the case then you have suffered a loss of twenty thousand dollars, your damages, your loss is twenty thousand dollars because you have a valid contract which is not being enforced. So what does the law ask you to do. The law asks you to try to mitigate your damages and in this case. How would you mitigate your damages. You will try to sell that car to someone else within the timeframe that you may have. Let's say if you are on a time crunch you only have a day left and you, put the ad out on Kijiji or in the newspaper and then you eventually are able to sell the car for a loss and you sell it, say for fifteen thousand dollars. So your damages really are now five thousand dollars against the person who had entered into contract with you for twenty thousand dollars.
So this is what you have done, Your initial damages were twenty thousand dollars and then you took steps to sell the car to someone else because the law says you have to try to mitigate those damages and you were able to partially mitigate meaning out of twenty thousand you recovered fifteen thousand dollars and the loss is five thousand dollars. Now imagine that if you were able to sell the car for twenty five thousand dollars then you actually have no losses against the party that you had contracted against. So you were able to fully mitigate your damages so even though the other party breached the contract. There are no resulting damages you have you're not entitled to any money if you are able to recoup all of your losses.
So that's what mitigation is and that's what it does. It tries to, in a way, help the party who has actually breached the contract by trying by imposing on you to try to minimize your damages. In employment law contracts what does this mean. In most of the wrongful dismissal cases the duty to mitigate arises because you're asking the court that you have suffered damages in the amount of X amount of dollars, say twenty thousand, hundred thousand, two hundred thousand dollars because that was the termination pay, severance pay, or reasonable notice that you were entitled to that the employer did not provide. So in this case the law imposes an obligation on you to try to mitigate those damages. So let’s say if the damages were one hundred thousand dollars. The court imposes a duty on you to do certain things so that the damages could be reduced from hundred thousand dollars. so that's what is an obligation to mitigate in employment law context and I will talk about how you go about doing this. One note that you want to keep in mind is that the obligation to mitigate an employment law does not arise in every single circumstance. There are some specific circumstances where you don't have an obligation to mitigate, those are very few circumstances, which are not common. So you must contact your lawyer and figure out whether you have an obligation to mitigate and if you do then you make sure that you fulfill that obligation.
So what do you do in employment context to mitigate your damages. Essentially you make efforts to look for another job right. That's how you will mitigate because your damages are employment damages. Your previous employer refused to give you notice for X. amount of dollars for or X. amount of months. So the way you can mitigate is by working for another employer for X. amount of months for X. amount of dollars and that's how you can mitigate.
So what are the things to keep in mind. The obligation is to make an effort and the court require you to make a reasonable efforts and what does that mean. If you are for example based in Toronto or in G.T.A. and you are working in the G.T.A. The law does not require you to go look for a job in Alberta are so Saskatchewan simply because you have an obligation to mitigate, because that will be considered unreasonable. So you don't have to fetch every single job that is that is relevant to you around the entire country. so reasonable efforts are required and then the second part that you want to keep in mind is that you have to look for a comparable job. So what that means is comparable to the previous job that you had at the former employer. what that means is example if you were a manager of accounts and and you have to look for a job you're not required to apply for jobs as a cashier in Wal-Mart or McDonald's because that's not a comparable job so comparable in terms of the duties that you had and also comparable in terms of pay. So if you were making one hundred thousand dollars at previous job. The law does not require you to you to go look for a job which pays you seventy five thousand dollars. So it doesn't have to be a match for a dollar to dollar but comparable.
So if you're making hundred thousand dollars ninety thousand dollars even eighty five thousand dollars maybe consider comparable but anything less than that may be considered you know not comparable. So you make reasonable efforts to look for a comparable job and final point is very very important.
You must keep full records of all off your activities and so what that means, one that you must keep sort of a summary or a log of all of the activities that you do you perform in your efforts to mitigate your damages and then you keep all the corresponding evidence so if you have been sending emails, you must keep record of those emails, if you have been sending letters, faxes, phone calls. You must keep evidence because this matter when you may go to trial and you may have to prove that you actually made those efforts. so you know your word alone is not sufficient. You know you must prove. You must prove this with evidence that you actually made those efforts.
So let me give you an example of how do you go about making those efforts. so here is something that we give our clients to look into with respect to job efforts. We usually give them this copy of the spreadsheet and say you want to make sure that you are following this. So this is sort of Excel spreadsheet. They have multiple columns in there. One is a date column. So you want to make sure that put the date when you are performing that activity. If you are looking for a job at a search engine let’s say, Indeed or at Workopolis or at a specific company website or through a recruiter you want to document that the name of the person that you contacted, a phone number, email address, what industry you're looking for that job, what was the title of the job, was it a full time job part time job. All of these things that you want to look at then what was the annual salary. So what was the income that was being offered. What was the location. How did you apply, did you send an email, were you called for an interview, did you attend in person. How many job postings did you review, how many postings did you actually apply. You know these are some of the things and then what was the outcome of these job searches so did you get any interviews if you got any callbacks whatever the response was You want to document. so this is spreadsheet as a summary it. It creates a log for you which you can review the lawyers can review the opposing counsel can review the judge can review the mediator can review and have a summary before them that shows them what kind of activities that you have performed.
Now you must keep the corresponding evidence so if you send faxes or e-mails for anything. You must keep those faxes and e-mails and because that is actually what is evidence and you must prove to the other side that you actually performed those activities so that comes to in terms of the jobs activities.
so what do you want to remember is that first of all you want to make sure that you confirm with your counsel or make sure that you are required to mitigate or not and you find this out early on. You don't wait for a few months or you know midway through your court action. You must know this from the outset of your case and most lawyers and it is our practice in our law firm that the moment we are retained we send a detailed memo to our client basically explaining to them what is mitigation how they're required to mitigate and how to keep records of that.
and then you make sure that you make reasonable efforts to mitigate and then you keep the records.
I'll give you a quick example of what a mitigation entails. So I recall one of our clients who lived in St Catharines she worked for a video store as a manager. the entire store closed down there were no comparable jobs available. She had very limited jobs in her area and so based upon herh skills at the comparable jobs that were being posted in her area were either none or were minimal. And so part of her mitigation effort was that she will look at the newspapers on a daily basis and find that there was no job that she could apply and then just keep records of those newspapers and at mediation we had this bundle of newspapers with us, basically showing that every single day she went and looked for a job in the newspapers, amongst other activities, but and all of these newspapers are there to demonstrate that there isn't a single job that was comparable to her skill set. So that's another way.
So it's not that you just need to prove what jobs you applied but whatever activities you performed. you look for a job you went online and you found nothing. You must prove that as well and then everything you do for instance calling your friends or attending networking events or meeting recruiters these are all activities that you are conducting to mitigate your damages. So you must record all of that so that the judge the mediator the opposing counsel has a full view of what activities you undertook.
mitigation is an important obligation. you cannot cannot ignore it and so it's important that you have good records and these do not minimize your damages because if you fail to mitigate your damages the court can reduce your damages and in some cases completely negate any of the damages that you are entitled to simply because you failed to mitigate your damages.
so hopefully this gives you a basic understanding of the obligation to mitigate in employment law context. If you have any further questions please contact us and any explanations that you require. Please let us know and we'll be happy to add that in the future lectures. Thank you for watching.