The Michaels v. Red Deer College decision of the
Supreme Court of Canada from 1976 held that employees pursuing
wrongful dismissal damages have a duty to mitigate their
damages. Mitigation earnings reduce the liability of the
employer for damages during the notice period to the extent of
those earnings. But what if the terminated employee had
another job prior to his or her termination of employment, which
allowed them to earn income during the notice period?
As employee counsel, this comes up frequently. The
employee who moonlights in real estate is a classic example.
Often there are negotiations around how that mitigation income will
be treated and what thresholds to apply because in principal, we
know that the income which would have been earned even if the
employee continued to be employed should not be deducted. We
also know that if the employee takes up a full time career in real
estate after the loss of his or her day job, then those earnings
cannot all
