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BC Court Confirms 24 Months’ Notice Remains The Normal Upper Limit For Common Law Reasonable Notice – Employment Litigation/ Tribunals


A recent decision from the Supreme Court of British Columbia,
Okano v. Cathay Pacific Airways Limited, 2022 BCSC 881, reaffirms that the upper limit
for common law reasonable notice is 24 months, absent exceptional
circumstances.

Background

The plaintiff was employed by the defendant, an airline company,
as a manager of their Vancouver Global Centre (the “Vancouver
Centre”). At the time of the plaintiff’s dismissal, she
was 61 years of age, had been employed by the defendant for nearly
35 years, and was the most senior person in her business unit.

The COVID-19 pandemic had a devastating effect on the airline
industry. The defendant implemented several measures in an attempt
to continue operations and reduce the need for mass employee
terminations. Ultimately, the defendant closed the Vancouver
Centre.

The defendant provided the plaintiff with two months’
working notice of the termination of her employment and offered her
a severance package in exchange for a release, which she declined.
Therefore, the defendant paid the plaintiff the statutory minimum
three-month severance as required by the Canada Labour
Code
, R.S.C. 1985, c. L-2. The plaintiff then commenced an
action for wrongful dismissal.

Analysis and Decision

24 months’ is the upper reasonable notice limit, save
exceptional circumstances.

The defendant admitted that the plaintiff was entitled to common
law reasonable notice damages for wrongful dismissal, but disagreed
on the quantum of damages being claimed. The plaintiff argued she
was entitled to payment in lieu of notice for a period of 24 to 26
months. The defendant argued she was entitled to closer to 18 to 20
months’ notice.

The court concluded that considering the plaintiff’s age,
length of service, and management role, she was entitled to 24
months’ notice. However, this was the limit – referencing
its 1986 decision in Ansari v. British Columbia Hydro and Power
Authority
, the court stated:

Our courts have been clear that, absent exceptional
circumstances, the upper limit for reasonable notice is 24
months… The mere fact that the plaintiff was a long-term valued
management-level employee does not constitute an exceptional
circumstance that would lead to an increase in the upper limit of
24 months.

Failure to mitigate reduces the damage award.

The court reduced the 24 months’ notice award by three
months, due to the Plaintiff’s failure to take reasonable steps
to mitigate her loss.

If a defendant can establish that a plaintiff failed to take
reasonable steps to mitigate their loss, the court may reduce the
reasonable notice damages awarded for wrongful dismissal. The court
explained this duty to act reasonably as taking “such steps a
reasonable person in the dismissed employee’s position would
take in her own interests – to maintain her income and her
position in her industry, trade, or profession”.

In this case, although the court recognized that an individual
whose employment has been recently terminated does not necessarily
fail to mitigate their loss if they do not immediately take steps
to seek alternative employment, the plaintiff did not apply for
jobs for several months following her dismissal. As well, although
she eventually applied for 50 jobs and attended 8 job interviews by
the time of the decision, she had not applied for positions in the
airline industry, despite several of those positions being similar
to her job with the defendant. The court found the plaintiff could
have found alternative employment in her industry had she taken
reasonable steps, and this was a failure to mitigate.

The court further reduced the plaintiff’s damage award by a
contingency discount of 15%. Although the plaintiff had been
unemployed for 17 months at the time of the decision, the court
determined that there was a real and substantial possibility the
plaintiff would secure employment prior to the end of the awarded
notice period. This conclusion was in part based on the fact that
the defendant had provided evidence of over 750 available jobs in
the Vancouver area with similar job descriptions and titles to the
plaintiff’s previous job with the defendant.

Key Takeaways

Absent exceptional circumstances, the length of reasonable
notice remains capped at 24 months. The fact that a dismissed
employee was a very long-service employee and in a managerial
position are not an exceptional circumstance warranting a
reasonable notice period higher than 24 months.

The onus is on the employer to demonstrate that the employee has
failed to mitigate their loss. A long delay by the plaintiff in
commencing their search for employment, a failure by the plaintiff
to apply for positions in their former industry, and/or evidence of
several available and equivalent job postings in the
plaintiff’s geographical area may all be considered evidence of
the employee’s failure to mitigate, potentially reducing the
amount of damages awarded.

To view the original article click
here

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.



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