Do I Need to Look for a Job After Being Wrongfully Dismissed in Ontario?
Being dismissed is stressful. For many employees, one of the first questions is whether they need to start looking for another job immediately — and whether finding new work will reduce what they are owed.
In Ontario, the answer is not as simple as many employers suggest.
Employees are often told that if they find a new job, they “lose their severance.” That is not necessarily true. In many cases, a dismissed employee does have a duty to make reasonable efforts to find comparable work. But Ontario law treats minimum statutory entitlements under the Employment Standards Act, 2000 differently from common law wrongful dismissal damages.
That distinction matters. It can affect whether an employer’s offer is fair, whether mitigation applies, and whether a dismissed employee may still be owed compensation even after securing a new role.
If you have been let go and are reviewing a package, Vanguard Law can help you assess whether the offer reflects only minimum standards or whether you may be entitled to more under common law. Learn more about Wrongful Dismissal or request a Severance Package Review.
What does mitigation mean after a wrongful dismissal?
In a wrongful dismissal case, mitigation means an employee is generally expected to take reasonable steps to reduce their financial loss by looking for comparable employment.
If the employee finds a new job during the common law notice period, that income may reduce the damages they can recover from their former employer.
But that does not mean every dollar earned after termination reduces every part of a dismissal claim.
That is where many employees are misled. In Ontario, the law distinguishes between:
ESA minimum termination and severance entitlements, and
common law reasonable notice damages
Those entitlements are not treated the same way, and the word “severance” is often used too loosely to capture that difference.
ESA minimums and common law notice are different
Under Ontario’s ESA, eligible employees may be entitled to notice of termination, termination pay instead of notice, or a combination of both. Some employees may also qualify for ESA severance pay, which is a separate statutory entitlement.
Ontario’s official guides on termination of employment and severance pay explain those minimum rights.
Common law notice is different. Unless a valid employment contract clearly limits an employee to ESA minimums, a dismissed employee may be entitled to substantially more compensation at common law.
That is why a package that looks acceptable at first glance may still fall short.
For a broader overview, see Vanguard Law’s guides on Am I Entitled to Severance Pay in Ontario? and What Is Considered Wrongful Termination in Ontario?.
Do I need to look for a new job after being wrongfully dismissed in Ontario?
In most cases, yes — if you are seeking common law wrongful dismissal damages, you should generally make reasonable efforts to look for comparable work.
However, that does not mean finding a new job automatically eliminates everything your employer owes you.
A dismissed employee may have rights to:
ESA termination pay
ESA severance pay, if the statutory requirements are met
additional common law notice damages
These rights serve different legal purposes and are not analyzed the same way.
So while job searching is usually advisable, it is a mistake to assume that re-employment ends the claim altogether.
Does mitigation reduce severance in Ontario?
Usually, mitigation can reduce common law damages, but it does not automatically reduce ESA minimum termination pay or ESA severance pay.
This is one of the most important distinctions in Ontario employment law.
The Ontario Court of Appeal addressed this issue in Brake v. PJ-M2R Restaurant Inc., a leading wrongful dismissal case. The court confirmed that statutory entitlements are treated differently from common law damages when considering mitigation. In other words, an employee’s post-termination earnings do not simply cancel out the statutory portion of their claim.
That is why a statement like, “You found another job, so you are not owed anything else,” may be legally incorrect.
The real question is whether the payment at issue is:
an ESA minimum entitlement
a common law notice entitlement
or a package that blends both together
That distinction is often missed in termination offers and negotiations.
Statutory notice period vs. common law notice period
The statutory notice period refers to the minimum period covered by the ESA.
The common law notice period refers to the longer period a court may consider reasonable based on factors such as the employee’s age, position, length of service, and the availability of similar employment.
This difference matters because post-termination income may affect one part of the claim and not another.
An employee who finds a new job quickly may still be entitled to statutory termination pay or ESA severance pay, even if their common law damages are reduced.
That is one reason employees should think carefully before signing a release. An offer may appear reasonable while only reflecting the minimum standards.
If you are dealing with that issue, Vanguard Law’s Toronto Employment Lawyer page and article on Laid Off vs. Terminated in Ontario: What’s the Real Difference? provide useful additional context.
What counts as reasonable mitigation?
The law does not require a dismissed employee to accept just any job. The issue is whether they made reasonable efforts to look for comparable employment.
Reasonable mitigation efforts often include:
updating a résumé and LinkedIn profile
applying for similar roles
speaking with recruiters
following up on appropriate opportunities
keeping a record of job search efforts
At the same time, employees are not necessarily required to accept work that is materially inferior or otherwise unreasonable in the circumstances.
Because mitigation is so fact-specific, it is risky to rely on general assumptions. What is considered reasonable depends on the employee’s role, compensation, experience, and the realities of the market.
What if I find a new job right away?
Finding new work quickly may reduce some or all of a claim for common law notice damages, depending on the timing and income involved.
But it does not automatically erase ESA minimum entitlements.
This is where employees sometimes make a costly mistake. They assume that once they have another role, there is no point having the package reviewed. In fact, the opposite may be true. A new job may affect only part of the claim, while leaving the statutory portion intact.
Vanguard Law’s related articles on What Is The Employment Standards Act? and The High Cost of Early Termination of Fixed-Term Employment Contracts offer additional insight into how notice and severance rights can vary depending on the type of dismissal.
The bottom line
So, do you need to look for a job after being wrongfully dismissed in Ontario?
In most cases, yes — if you are pursuing common law damages, you should generally make reasonable efforts to look for comparable work.
But no — finding a new job does not automatically wipe out everything you may be owed.
Ontario law treats ESA minimum termination pay and ESA severance pay differently from common law notice damages. The real legal question is not simply whether you found another job. It is whether your employer has properly assessed the statutory and common law components of your entitlement.
That is why a proper review matters.
Speak with Vanguard Law
If you have been dismissed and want to know whether your employer’s offer is fair, Vanguard Law can review your termination package, employment agreement, and compensation structure to determine whether you may be owed more.
Learn more about Wrongful Dismissal, review your Severance Package, or speak with a Toronto employment lawyer at Vanguard Law.
FAQ
Do I have to look for a job after being wrongfully dismissed in Ontario?
Usually yes. If you are claiming common law wrongful dismissal damages, you are generally expected to make reasonable efforts to look for comparable employment.
Do I lose severance if I find a new job?
Not necessarily. A new job may reduce common law notice damages, but it does not automatically eliminate ESA minimum termination pay or ESA severance pay.
What is the difference between termination pay and severance pay in Ontario?
Termination pay is ESA pay provided instead of working notice. Severance pay is a separate ESA entitlement available only to qualifying employees who meet the statutory requirements.
Can my employer say I am owed nothing because I found another job?
Not automatically. Whether replacement income affects what you are owed depends on whether the payment is a statutory ESA entitlement or common law notice damages.
Why should I have my severance package reviewed?
Because many termination offers reflect only minimum statutory obligations. A review can help determine whether you may be entitled to more under common law.