The Duty to Mitigate in Canada: What to Do After You Are Fired

What Is the Duty to Mitigate?

The duty to mitigate means that a wrongfully dismissed employee must make a reasonable effort to reduce their losses after losing their job.

In employment law, this usually means trying to find new comparable employment after you are fired, laid off, or pushed out of your job.

Put simply, you generally can’t sit at home, make no effort to find work, and expect your former employer to pay your full severance. You must take reasonable steps to look for another job.

This does not mean you have to take any job. It does not mean you have to accept a major pay cut, a humiliating demotion, or work that is clearly not suitable for your background.

The duty to mitigate is about reasonable effort. It is not about perfection.

If you were let go and your employer offered you severance, use our Severance Pay Calculator or speak with an employment lawyer at Samfiru Tumarkin LLP before you sign anything.

Duty to Mitigate at a Glance

Here is the short answer.

• The duty to mitigate requires a dismissed employee to make reasonable efforts to find comparable work.
• You do not have to accept a job that is clearly inferior to the one you lost.
• You should keep records of job applications, interviews, recruiter calls, networking, and job search activity.
• If you find new work during the notice period, your severance may be reduced by your new earnings.
• If your new job pays less, you may still be owed the difference during the notice period.
• Your former employer has the burden of proving that you failed to mitigate.
• Lying about a new job or income can seriously damage your case.

What Does Duty to Mitigate Mean in Employment Law?

In employment law, the duty to mitigate means that an employee who was wrongfully dismissed must take reasonable steps to reduce the financial loss caused by the termination.

This usually comes up in a wrongful dismissal claim where an employee is seeking common law severance, also called reasonable notice or pay in lieu of notice.

For example, if you are owed 12 months of severance, you are expected to look for comparable work during that period. If you find a new job quickly, the income you earn may reduce what your former employer has to pay.

However, your employer cannot simply accuse you of failing to mitigate. They must prove that you failed to take reasonable steps and that comparable work was available.

What Is Comparable Employment?

Comparable employment means work that is reasonably similar to the job you lost.

It does not have to be identical. But it should be similar enough that a reasonable person in your position would seriously consider it.

Comparable employment usually looks at:

• Salary: Is the pay similar to what you were earning?
• Benefits: Are health, dental, pension, bonus, commission, or other benefits comparable?
• Level of responsibility: Is the role similar in seniority, authority, and status?
• Job duties: Does the work match your skills, training, and experience?
• Working conditions: Are the hours, schedule, environment, and expectations reasonable?
• Commute: Is the location practical, or would it create an unreasonable travel burden?
• Remote or hybrid work: If your old job was remote or hybrid, a fully in-office role may not always be comparable.

You generally do not have to accept a job that involves a major pay cut, a clear demotion, worse working conditions, a much longer commute, or duties far below your experience level.

At the same time, you should not reject a reasonable job opportunity just because it is not perfect. Courts look at the full picture.

What Jobs Do You Have to Apply For?

You should apply for jobs that are reasonably connected to your background, skills, experience, and compensation level.

A reasonable job search may include:

• Applying for similar roles in your industry
• Applying for similar roles in related industries
• Contacting recruiters
• Updating your resume and LinkedIn profile
• Networking with former colleagues or industry contacts
• Attending interviews
• Keeping track of job postings you reviewed

You do not have to apply for every job you see. But you should be able to show that your search was active, organized, and reasonable.

How Finding a New Job Affects Your Severance Pay

Finding a new job can affect your severance pay.

• If you are owed 12 months of severance but find comparable work after three months, your former employer may only be responsible for the three months you were out of work.
• If your new job pays less, your former employer may still owe you the difference between your old compensation and your new compensation during the notice period.

For example:

How to Prove You Are Mitigating Your Damages

The best way to prove mitigation is to keep a clear record of your job search.

Do not rely on memory. Keep a spreadsheet or document that tracks your efforts every week.

Your mitigation log should include:

• The date you found each job posting
• The company name
• The job title
• The posting link or screenshot
• The date you applied
• The resume and cover letter you submitted
• Any recruiter or HR contact
• Interview dates
• Follow-up emails
• Rejection emails
• Notes about why a job was not comparable

You should also save copies of application confirmation emails, recruiter messages, interview invitations, job descriptions, and LinkedIn messages.

When Should You Start Looking for Work?

You do not have to start applying for jobs the minute you are fired.

It is reasonable to take a short period of time to process the termination, update your resume, speak with a lawyer, and prepare your job search.

However, you should not wait too long. If weeks or months pass with little or no job search activity, your former employer may argue that you failed to mitigate your damages.

A practical approach is to begin preparing your job search within the first week or two after termination, unless there is a valid reason you can’t do so.

Do You Have to Accept a Job With Your Former Employer?

Sometimes an employer will offer a dismissed employee a chance to return to work, often during the notice period.

You may have to consider the offer if a reasonable person in your position would accept it.

However, you are not usually required to return if the workplace would be hostile, embarrassing, humiliating, unsafe, or if the offer is not truly comparable.

Before refusing or accepting an offer to return to your former employer, get legal advice. This decision can have a major impact on your severance claim.

Can You Go Back to School or Retrain Instead?

Retraining can be reasonable in some cases, especially if your industry has changed, your role has become less common, or additional training would improve your chances of finding comparable work.

However, retraining is not always enough on its own. If you stop looking for work completely and only focus on school, your former employer may argue that you failed to mitigate.

The safest approach is to get legal advice before choosing retraining instead of an active job search.

Do You Have to Tell Your Employer You Found a Job?

Yes. If you find a new job during the notice period, you should disclose it during severance negotiations or legal proceedings.

You should also be honest about your new compensation.

Lying about a new job, hiding income, or refusing to provide reasonable proof can seriously damage your credibility and reduce your claim.

If your new job pays less, you may still be owed money for the shortfall. That is another reason to be honest and get legal advice before agreeing to a final settlement.

Who Has to Prove a Failure to Mitigate?

Your former employer has the burden of proving that you failed to mitigate.

To reduce your severance, an employer generally has to show two things:

• You failed to make reasonable efforts to find comparable employment.
• If you had made reasonable efforts, you likely would have found comparable employment.

Provincial Differences and Key Case Law

The duty to mitigate applies across Canada in wrongful dismissal and constructive dismissal cases, but courts in different provinces can apply the rule in different ways.

Below are key provincial notes for Ontario, British Columbia, and Alberta.

Duty to Mitigate in Ontario

Ontario courts often look closely at whether the employee made a reasonable search for comparable employment and whether the employer can prove that better efforts would likely have resulted in a new job.

• In Brake v. PJ-M2R Restaurant Inc., the Ontario Court of Appeal confirmed that an employee was not required to accept a humiliating demotion as mitigation. The case is often cited for the idea that employees do not have to accept work that is clearly inferior or unreasonable in the circumstances.
• In Lake v. La Presse, the Ontario Court of Appeal reinforced that an employer must do more than point to weaknesses in a job search. The employer must also show that reasonable efforts would likely have led to comparable work.
• In Boyle v. Salesforce.com, the court reduced the notice period after the employee failed to produce key mitigation-related income information. The lesson for employees is simple: keep clear records and be transparent about job search efforts and new income.

Ontario employees should also understand the difference between minimum entitlements under the Employment Standards Act and full common law severance. ESA minimums are not the same as your full severance rights.

Duty to Mitigate in British Columbia

British Columbia courts expect dismissed employees to make an active and organized effort to find comparable work.

BC cases often refer to the need for a constant and assiduous application for alternative employment. In plain English, this means you should be able to show a steady, serious job search.

• In Smith v. Aker Kvaerner Canada Inc., the court discussed the need for reasonable and active efforts to find new work. The case is often cited for the importance of showing a genuine job search.
• In Mac’s Convenience Stores Inc. v. Basyal, the BC Court of Appeal confirmed that employees on fixed-term contracts generally have a duty to mitigate if the contract is ended early, unless the contract says otherwise.

BC employees should keep detailed job search records, especially if they are pursuing full common law severance rather than only the minimum amount under the Employment Standards Act.

Duty to Mitigate in Alberta

Alberta employees also have a duty to make reasonable efforts to find comparable work after a wrongful dismissal.

Alberta courts can consider the local economy and the availability of comparable work when assessing mitigation. In industries such as oil and gas, energy, construction, and technology, market conditions can affect how realistic it is to find a similar role quickly.

If there is an economic downturn, limited hiring, or fewer comparable jobs in your field, that can support your position that it took longer to find new work. But you still need to show that you made reasonable efforts.

Common Mitigation Mistakes After Being Fired

Avoid these mistakes after losing your job:

• Not looking for work at all
• Waiting too long to start your job search
• Only applying to a small number of jobs
• Applying only to jobs that are far above your previous role
• Rejecting comparable work without a good reason
• Failing to keep records of your job search
• Deleting application emails or recruiter messages
• Hiding new income from your former employer
• Refusing to provide reasonable income documents during a legal claim
• Assuming your severance is safe even if you do nothing

What to Do After You Are Fired

If you were fired, take these steps to protect your severance claim:

• Do not sign your severance offer right away.
• Save your termination letter and severance package.
• Save your employment contract, bonus plan, commission plan, and benefit documents.
• Use the Severance Pay Calculator to estimate your possible entitlements.
• Start preparing your job search.
• Keep a mitigation log.
• Save proof of every application, recruiter call, and interview.
• Speak with an employment lawyer before accepting any offer.

Get Your Severance Package Reviewed

If you were fired and offered severance, your duty to mitigate can affect how much compensation you ultimately receive.

But it does not give your employer permission to offer you less than you are owed.

Samfiru Tumarkin LLP helps non-unionized employees understand their rights after a termination, assess severance offers, and respond to employer claims about mitigation.

Before you sign anything, find out what your severance package is really worth.

Duty to Mitigate FAQs

What does duty to mitigate mean in employment law?

The duty to mitigate means that a wrongfully dismissed employee must make reasonable efforts to reduce their losses, usually by looking for comparable employment after losing their job.

Do I have to look for work after being fired?

Yes, if you are pursuing common law severance or a wrongful dismissal claim, you are generally expected to look for comparable work.

Do I have to accept any job?

No. You generally do not have to accept a job that is clearly inferior, significantly lower paying, humiliating, unsafe, or not comparable to the role you lost.

What is comparable employment?

Comparable employment is work that is reasonably similar in pay, duties, seniority, status, hours, working conditions, and location.

Can my severance be reduced if I find a new job?

Yes. If you find a new job during the notice period, your new earnings may reduce the amount your former employer owes. If the new job pays less, you may still be owed the shortfall.

What happens if I do not look for work?

If your employer proves that you failed to make reasonable efforts to find comparable work and that suitable work was available, your severance damages may be reduced.

Who has to prove failure to mitigate?

Your former employer has the burden of proving that you failed to mitigate. They must usually show that your efforts were unreasonable and that comparable work was available.

Do I have to tell my former employer I found a job?

Yes. If you find a new job during severance negotiations or a legal claim, you should disclose it. Hiding new income can seriously hurt your case.

Can I go back to school instead of looking for work?

Sometimes retraining can be reasonable, but it depends on the situation. If you stop looking for work completely, your employer may argue that you failed to mitigate.

Should I keep a record of my job search?

Yes. Keep a spreadsheet or written log of job postings, applications, interviews, recruiter calls, networking, and rejection emails. This can help prove that you made reasonable efforts.

Does the duty to mitigate apply to unionized employees?

Unionized employees usually have to deal with termination and reinstatement rights through their collective agreement and union. This page is focused on non-unionized employees.