Written on behalf of Peter McSherry
In light of the circumstances of the past few years, it is not uncommon for some individuals to be concerned about losing their job. In the event of termination, one might instinctively seek new employment. However, after a termination, it is important to ensure that an employee’s rights have been upheld and adhered to in respect of severance. A recent Ontario Superior Court of Justice decision highlights that an employee may be entitled to more time, in lieu of notice, than an employer is prepared to offer. Ensuring that an employee obtains fair treatment, particularly with respect to notice, can be a powerful tool in providing more time for a job search.
Airline reduces workforce as a result of COVID-19
Like many employers providing services in the travel and tourism sectors, airline traffic was reduced significantly as a result of the COVID-19 pandemic. As a result, one of Canada’s airlines (“the employer”) decided to reduce its workforce by 50%.
In Williams v. Air Canada, the plaintiff employee, began working for the employer on June 3, 2000. She had previously been working for another airline, which the employer acquired. As a result, her “start date” was mutually agreed to have been in 1996, instead of 2000.
In 2020, the employee was working as the International Operations Training Manager. She earned a base salary of $70,380, received benefits and medical coverage, received a pension plan, an annual incentive plan (“AIP”) and a profit sharing plan (“PSP”). She also benefitted from travel privileges, which she considered a part of her compensation.
Employee refuses severance package offered by employer
The employer offered employees severance packages during the layoff period. However, the employee refused to accept hers. As a result, the employer terminated her without cause and provided her with the minimum statutory entitlements under the Canada Labour Code. Per the code calculations, the employee was found to be owed an amount of $11,289, approximately one month’s salary.
After two years of job hunting, the employee obtained a part-time role as a commercial training teacher for an air services company.
Should the employee have received more pay in lieu of notice?
When the matter was brought before the Court, it was held that an employee who is terminated without cause, and who is not permitted to work during a notice period, is entitled to what they would have earned during that period, including salary and incentives. While reasonable notice periods vary from case to case, certain factors must be considered. These factors include the character of the employee’s employment, their experience, training, and qualifications. An employee’s age might also be relevant.
The Court noted that the employee had worked for the employer for approximately 24 years. The Court stated that a longer notice period should generally be provided to long-term employees. The employee was 52 years old at the time of her termination, a factor which may have impacted her search for new employment.
In termination circumstances similar to the ones at hand, it is important to consider whether an employee has mitigated their damages and losses by seeking, or obtaining, new employment. In this case, the employee applied to 17 jobs between June 2020 to July 2021 and was invited to two interviews, neither of which resulted in a job offer.
Court finds that pandemic left employee with employment uncertainty
The employer argued that if the employee was entitled to additional notice, a reasonable period would be 12 months. However, the employee sought a notice period equivalent to 24 months. The employer attempted to justify their position by stating that the employee was in the more “junior” half of their employee structure and was not a true manager. However, the Court disagreed based on an evaluation of the nature of the employee’s work, which required her to train people, is evidence justifying a longer notice period.
The Court also found that the reason for the termination, which was due the COVID-19 pandemic, left the employee with even more employment uncertainty, which further justified a longer notice period..
The Court agreed with the employee that a notice period of 24-months was appropriate in the circumstances.
What about benefits?
The Court then turned to the question of the non-salary components of the employee’s compensation which included benefits, a pension, AIP and PSP. The employee took the position that she was entitled to damages for the value of those benefits throughout the notice period. Meanwhile, the employer claimed that absent any evidence of actual loss, the employee was not entitled to damages in respect of group benefits.
The Court disagreed with the employer’s position and found that the employee was entitled to receive all of these benefits for the period of her notice. The only benefit the employee was not found to be entitled to receive was flight privileges since those were not contractual entitlements.
Peter McSherry Employment Lawyers Protect Employees Rights and Assist in Termination Disputes
Guelph employment lawyer Peter A. McSherry understands the concerns a recently terminated employee may have, particularly when dealing with a wrongful dismissal or constructive dismissal. Our team prides itself on protecting the rights of employees to ensure they recover compensation following a dismissal or severance process. We support clients throughout the process and provide them with the resources to take action. To speak with our firm regarding your employment questions and concerns, contact us by phone at 519-821-5465 or reach out online.