In Manitoba, you have a legal duty to “mitigate your damages” by actively looking for a new job after being fired. If you find comparable employment quickly, your former employer may be able to reduce or stop your ongoing severance payments, depending on how your settlement is structured.
Losing your job is a massive financial shock. Most professionals in Winnipeg, Brandon, and Selkirk immediately update their resumes and start hunting for a new position to keep the bills paid. However, a common fear is that securing a new job will somehow cancel the severance pay you are owed from your old employer.
Severance under common law is meant to act as a financial bridge between jobs, not a lottery ticket. 🔍 Because of this, Canadian courts require you to actively try to minimize your financial losses—a concept known as “mitigation.” Understanding how a new job offer interacts with your severance package is critical. A local employment lawyer can help you negotiate a settlement that protects your payout even if you get hired somewhere else quickly.
Step-by-Step Process for Managing Mitigation in Manitoba
How you conduct your job search and how you sign your severance agreement drastically affects your bank account. Follow these steps to maximize your financial outcome.
Step 1: Keep a Strict Job Search Diary
From the day you are terminated, you must document your efforts to find work. 📝 Keep a spreadsheet of every job you apply for, every interview you attend, and every networking email you send. If your former employer tries to deny you severance by claiming you “didn’t even try to find a job,” this diary is your ultimate legal defence.
Step 2: Understand the Two Types of Severance
Severance is usually paid in one of two ways. A “Lump Sum” is a single, one-time payment; usually, finding a new job after receiving a lump sum does not affect the money you already received. “Salary Continuation” means you stay on the payroll for a set number of months; this type almost always includes a “clawback” clause that stops the payments once you find new work.
Step 3: Review the New Job Offer Carefully
You are only expected to accept “comparable” employment. 🤔 If you were a Senior Marketing Director earning $120,000, you do not have to accept a job as a retail cashier to mitigate your damages. If you take a job that pays significantly less than your old job, your former employer generally still has to pay you the difference during your severance period.
Step 4: Negotiate a Favourable Settlement
Before accepting any severance offer, hire a Manitoba employment lawyer. A skilled lawyer will push for a lump-sum payment or negotiate a “50% mitigation clause,” meaning if you find a new job, the old employer still has to pay you out 50% of the remaining severance rather than cutting you off completely.
How Much Does it Cost to Hire a Severance Lawyer?
Negotiating the structure of your severance package is where a lawyer provides the most value, ensuring you don’t lose thousands of dollars just because you are highly employable. 💵
| Employment Legal Service | Estimated Cost (CAD) |
|---|---|
| Severance Package Review & Advice | $300 – $600 (Flat Fee) |
| Lawyer Drafting a Counter-Offer | $500 – $1,000 |
| Full Severance Negotiation | Hourly ($300-$600/hr) or Contingency |
| Wrongful Dismissal Lawsuit | 25% – 35% (Contingency Fee) |
Reaching out to a local law firm from our directory guarantees you understand the mitigation clauses hidden in your termination letter before you sign it.
How Long Does the Process Take?
The “notice period” (the time your severance is meant to cover) can range anywhere from a few weeks up to 24 months for senior employees under common law. 🕑 Negotiating the initial severance package usually takes 4 to 8 weeks. Once a final lump-sum agreement is signed and the release is filed, the matter is closed, and you are generally free to start a new job the very next day without penalty.
Frequently Asked Questions (FAQ)
What is a ‘clawback’ clause in a severance offer?
A clawback clause states that if you are receiving your severance as salary continuation, the payments will drop by a certain percentage (often 50% or 100%) as soon as you earn income from a new employer. It is designed to save the old company money if you find work quickly.
Do I have to tell my old employer if I find a new job?
If you signed a settlement agreement that includes a duty to report new income, yes, you are legally bound to inform them. Lying about finding a new job while continuing to collect salary continuation is a breach of contract and they can sue you to return the money.
Does finding a new job affect my Employment Standards minimum pay?
No. The absolute minimum notice or pay-in-lieu of notice guaranteed by the Manitoba Employment Standards Code is statutory. You get to keep this minimum amount regardless of whether you find a new job the very next day. Mitigation only applies to the larger “common law” severance amounts.
What if my new job pays much less than my old one?
If you take a lower-paying job to keep money flowing, your old employer does not completely off the hook. They are generally still required to “top you up” by paying the difference between your old salary and your new salary for the duration of your reasonable notice period.
Leave a Reply