In the recent decision of Okano v. Cathay Pacific Airways Limited, 2022 BCSC 881 (“Okano”), the Supreme Court of British Columbia re-affirmed that absent exceptional circumstances, reasonable notice remains capped at 24 months in British Columbia.
The employer’s business was significantly impacted by the COVID-19 pandemic. In October 2020, the employer decided to close its Vancouver Centre and terminate the plaintiff’s employment. At the time of her dismissal, the plaintiff was working in a middle-management position. She was 61-years old and had worked for the employer for almost 35 years. The employer offered a severance package, which the plaintiff declined, and paid her statutory notice entitlement. The plaintiff commenced an action for wrongful dismissal claiming she was entitled to 24-26 months’ notice.
The Upper Limits of Reasonable Notice
It has long been recognized in British Columbia that, absent “exceptional circumstances”, the upper limit of reasonable notice is 24 months. This upper limit has stood the test of time in this province. To our knowledge, there are no British Columbia cases to date which have assessed reasonable notice in excess of 24 months.
The plaintiff in Okano claimed an entitlement to “24-26 months’ notice” based primarily on the basis of her age, length of service, and managerial position. The Court confirmed the 24-month upper limit first articulated in Ansari v. British Columbia Hydro and Power Authority (1986), 2 B.C.L.R. (2d) 33 (S.C.). The Court also re-affirmed that the mere fact that the plaintiff is a long-service managerial employee is not an “exceptional circumstance” warranting a notice period longer than 24 months. The Court assessed reasonable notice at 24 months in Okano.
Failure to Mitigate
The Court further found that the plaintiff failed to mitigate. Even though she had applied for 50 jobs, she failed to apply for available opportunities in the airline industry. The Court found that the plaintiff was required to apply for similar jobs in the airline industry, where she had spent almost her entire career. The failure to do so was unreasonable and constituted a failure to mitigate. As a result, the Court deducted three-months from the damage assessment.
Despite the fact that the plaintiff had been unemployed for 17 months, the Court decided there was a real and substantial possibility that the plaintiff would find a new job consistent with her experience and qualifications during the balance of the notice period. The Court awarded a 15% contingency deduction for the potential that the plaintiff may find employment during the balance of the notice period – further reducing her damages.
Takeaways for Employers
Okano re-affirms the 24-month upper limit of reasonable notice in British Columbia. This is good news for B.C. employers. Although the decision does not discuss what kinds of facts might constitute “exceptional circumstances”, the court’s analysis demonstrates that “exceptional circumstances” means something truly exceptional. It will not be enough for the employee to be an older or long-service management employee to warrant deviating from the 24-month upper limit.
Finally, this decision also re-affirms that reasonable mitigation requires that a dismissed employee pursue available opportunities in their field or industry. The failure to do so can result in a reduction in the damages awarded for wrongful dismissal.
For questions about this article, please contact Nicole C.M. Toye or your Harris lawyer.