Only employment income that is the result of the dismissed employee searching for, and obtaining, new work as a result of the employee’s dismissal will be deducted from the employee’s notice and severance entitlements. Other employment income will not be deducted if it was not earned as a consequence of the dismissal. This is because the general principal of mitigation that a plaintiff cannot recover for any part of his loss which he has successfully avoided by his subsequent action is subject to the modification that the subsequent transaction must be one arising out of the consequences of the breach and in the ordinary course of business.1 

The most common example of employment income that will not be deducted is income that the dismissed employee was already earning at a second job. The income the dismissed employee continues to earn at his or her second job is not a consequence of his or her dismissal and, therefore, will not be deducted as mitigation income.  However, if the individual is able to earn additional employment income at the second job because the individual now has more time to devote to that job, the resulting increase in income from the second job would be deducted because it is a consequence of the employee’s dismissal.

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  1. see Apeco of Canada Ltd. v. Windmill Place, 1978 2 S.C.R. 385;