Mitigation - Understanding Your Legal Obligations

Previously, we discussed the top 5 tips right after being dismissed from a job. We also discussed that while you may have severance rights, there is a catch.

What is the catch?


What is mitigation about?

Hand-in-hand with a legal entitlement usually is a correlating legal obligation. In this case, the legal corollary for an employee’s severance entitlements is "mitigation".

The law says that while you have access to severance as a dismissed employee, you have to actively look for replacement work (meaning, replacement income during that same period of time when you should be receiving your severance) to minimize your losses.

If you in fact secure replacement work, your severance will be reduced. On the other hand, if you do not make adequate efforts to look for replacement work, your severance will most definitely be reduced. That is the catch.

What do you do about this, and why even try to pursue your severance rights?


What do you do with the catch?

The key is that mitigation is not intended to be difficult for the dismissed employee. It requires the employee to look for, not secure, replacement work.

The law does not require you to go out of your way and put in extraordinary job search efforts you would not normally make. The law also does not require you to accept an unreasonable job or a job that is not comparable. For example, if accepting the new job means taking on a significant downgrade or pay cut, that would be unreasonable. The law does not require you to move away from your family.

In fact, the law does not require you to take any step that would be considered unreasonable. The law simply requires the employee to do what an ordinary person would do to reasonably look for a job that is comparable.

This means, as long as you have taken appropriate steps to look for replacement income, your severance entitlements should be uncompromised. You have fulfilled your side of the legal obligation, and now it is up to your employment lawyer to go after the rest from your employer.

Even though it is your legal obligation to mitigate, in reality it is not difficult to meet this obligation.


Consequences of not mitigating

If you do not make efforts at all to reasonably look for replacement income, the law will reduce the severance entitlements you are otherwise able to receive. The amount of reduction depends on your unique circumstances. It is rare for your severance entitlements to completely disappear.


Putting the above in practice:

1. Looking for comparable replacement work

That means:

  • You have to look for a job.
  • When you see a suitable job posting, you need to apply.
  • Where it makes sense to attend career seminars, you should sign up and go.
  • If it is logical to network or have coffee with others, set up the meetings and attend.
  • If you are offered an interview, you should attend.
  • When you are offered a comparable job, you have to consider taking it.

Your employment lawyer should give you practical tips on what efforts are considered acceptable and what a comparable job means. Importantly, your lawyer will talk to you about the timing in doing all that.

Listen to your lawyer.


2. Can you start a new business or go back to school?

Sometimes, it makes sense to start your own business instead of simply looking for a job. Going back to school, pursue career training, or taking professional development courses may also come to mind as a stepping stone to moving onto the next career gig. In fact, you may even consider switching fields or career altogether.

However, do not rashly decide to attempt any of the above unless you have explored this with your employment lawyer.

As a general rule, any of these “alternative ventures” may be acceptable if it makes sense. If it does not make sense, then it is not mitigation.

What makes sense and what does not is highly fact driven, and all depends on what your unique circumstances are. There is no one-size-fits-all template when it comes to mitigation.

Your employment lawyer will help you assess that, strategize, and make the most of your career aspirations.


Mitigation is ongoing

Active mitigation does not stop at two weeks post-dismissal, not a month, not two months, and in fact, not any arbitration set date. Mitigation should not stop until you have moved onto the next job, or, your severance case is resolved.

Your legal obligation to put in efforts and offset your income losses is ongoing.

Your employment lawyer will coach you on how to put together a simple folder or log to keep the mitigation efforts going, to keep adding to your mitigation records, and to build your case.


Other Income is unaffected

Keep in mind mitigation is about replacing the losses stemming directly from the dismissal. If you have been earning other income while working for the former employer, you can continue earning such other income, and your severance would be unaffected. This includes interest income on any kind of investment, a second part time job, and other contract or freelance work you would normally take on outside of your employment with the former employer, and such other unrelated income.


What if you can’t mitigate?

In certain circumstances, an employee may be excused from having to seek alternate work or income replacement. Common scenarios where that may be the case include where the employee has a medical condition preventing the employee from working or looking for a job at all, the employee in the middle of a leave of absence, or the employee is about to retire.

If any of that applies to you, be sure to alert it to your employment lawyer. Your lawyer may explore with you any additional rights you may have.


Take-aways

Critically understanding mitigation is important when pursuing whatever severance you may be entitled to. Don't let mitigation get in the way of your severance rights.

Top take-aways for employees on mitigation are:

  • A dismissed employee looking for severance has an obligation to look for comparable replacement work;
  • Keep good mitigation records;
  • A new job, if secured, could affect the employee's severance entitlements;
  • Likewise, failure to mitigate could affect severance entitlements;
  • Which means, strategize carefully, and time it right.