Mitigation (duty to mitigate)

Mitigation is a dismissed employee's duty to make reasonable efforts to find new work, which can reduce what an employer owes in damages.

Also called: duty to mitigate, mitigating damages, mitigation of damages

What mitigation (duty to mitigate) means

The duty to mitigate means that an employee who has been dismissed without enough notice has to take reasonable steps to reduce their loss, usually by looking for a comparable job. If they find one during the notice period, what they earn there generally reduces the damages you owe. If they make no real effort, a court can reduce the damages as well.

It matters to employers because it affects how much a wrongful dismissal claim is worth. It does not mean the employee has to take any job at all, and it does not let you skip paying what you owe up front.

How it works

Mitigation applies to common-law damages for reasonable notice, the claim an employee makes in court for wrongful dismissal. Statutory minimums under employment standards law are a separate question, so do not count on reducing those.

The employer carries the burden. The Supreme Court of Canada held in Red Deer College v. Michaels that the employer must prove the employee failed to mitigate, and called that burden "by no means a light one". In Evans v. Teamsters Local Union 31 (2008), the Court said the employer has to show both that the employee did not make reasonable efforts to find work and that suitable work could have been found.

What counts as reasonable depends on the person. Courts generally look for a genuine, documented search for work similar in type, level and pay, in a reasonable area. Employees are usually given some time to look before they are expected to accept a lesser role.

For employers, this means a few practical things. A lump-sum payment of the full notice period ends the question, but you lose the benefit of mitigation. Paying notice as salary continuance, where the contract allows it, can let payments stop or reduce when the person finds work. Whatever you choose, put it in writing and get advice for long-service or senior employees.

Is it the same in every province?

The duty to mitigate is a common-law rule set by the Supreme Court of Canada and applies in every common-law province and territory. Quebec's civil law has its own rules on reducing damages, and whether mitigation affects employment standards minimums is a separate question for each province.

Example: Salary continuance at a Halifax marketing agency

Aisha runs an 11-person marketing agency in Halifax. She ends the job of an account manager without cause and, after legal advice, agrees to pay his Nova Scotia minimum notice in full with his final pay, plus additional notice as salary continuance that stops if he starts a comparable job.

Six weeks into the salary continuance he starts a new role at similar pay. The continuance ends as agreed. Aisha's lawyer had drafted the agreement so both sides knew exactly what would happen.

Hollis handles the exit checklist

Whatever happens with common-law damages, the statutory amounts still have to be paid on time. Hollis's exit checklist shows the final pay timing, vacation pay owed and ROE deadline for your province.

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Employment standards: termination notice by province

Questions about mitigation (duty to mitigate)

Does a fired employee have to look for a new job?

If they are claiming common-law damages for wrongful dismissal, yes. They must make reasonable efforts to find comparable work, and new earnings generally reduce the damages.

Who has to prove failure to mitigate?

The employer. It must show the employee did not make reasonable efforts and that suitable work could have been found.

Does mitigation reduce statutory termination pay?

Treat statutory minimums as owed in full. Mitigation is a common-law idea that applies to damages above the minimums.

Official sources

General information for Canadian employers, not legal advice. Rules differ by province and territory and change over time, so check with your provincial employment standards office (or the federal Labour Program if you are federally regulated) before you rely on it. See employment standards by province.

Checked against official sources on 4 November 2026.