IN THE SUPREME COURT OF BRITISH COLUMBIA Citation: Okano v. Cathay Pacific Airways Limited, 2022 BCSC 881 Date: 20220526 Docket: S213760 Registry: Vancouver Between: Frances Turcic Okano Plaintiff And: Cathay Pacific Airways Limited Defendant Before: The Honourable Justice G.C. Weatherill Reasons for Judgment Counsel for the Plaintiff: G.C. Allison Counsel for the Defendant: S. Mitchell Place and Date of Hearing: Vancouver, B.C. May 17, 2022 Place and Date of Judgment: Vancouver, B.C. May 26, 2022 2022 BCSC 881 (CanLII) Okano v. Cathay Pacific Airways Limited Page 2 Introduction [1] The plaintiff seeks judgment against the defendant pursuant to Rule 9-7 of the Supreme Court Civil Rules, B.C. Reg. 168/2009, for damages for wrongful dismissal. [2] The defendant admits that the plaintiff is entitled to such damages but disputes the quantum being claimed on several bases, including that the plaintiff failed to mitigate her loss. Background [3] The plaintiff is currently 61 years of age. She was employed full-time by the defendant for almost 35 yearsfrom March 31, 1986, until December 11, 2020. She spent her entire working career in the defendant's sales and customer service departments, rising through the ranks from a frontline reservations agent to manager of the defendant's Vancouver Global Centre, or its equivalent, for the past 25 years. She was the most senior person in her business unit, with budgeting and hiring/firing responsibilities. She reported directly to the defendant's head office in Hong Kong. [4] The plaintiff's termination occurred in the context of the COVID-19 global pandemic, which caused an unprecedented downturn in airline travel and had a devastating effect on the defendant's business. The defendant's monthly passenger numbers from March to December 2020 were less than 1% of what they had been for the same months the previous year. [5] In response to the pandemic, the defendant introduced several measures to continue operations and reduce the need for mass employee terminations. In February 2020, the defendant implemented a "Special Leave Scheme" ("SLS #1"), by which employeesincluding the plaintiffreceived three weeks leave which was deducted from their salary over the four-month period from March to June, 2020. [6] Prior to July 2020, the plaintiff's monthly salary was $9,900 plus a noncompounding allowance ("NCA") of $173 as compensation for her being at the top of her pay scale, and hence not eligible for a pay increase, and a monthly pension contribution of 10% of her salary ("Pension Contribution"). 2022 BCSC 881 (CanLII) Okano v. Cathay Pacific Airways Limited Page 3 [7] In June 2020, the defendant implemented a second Special Leave Scheme ("SLS #2") which reduced employee salaries by set amounts. In the plaintiff's case, her monthly salary was reduced by 7% for the period of July to December 2020 to $9,207, plus the NCA and Pension Contribution. [8] On October 13, 2020, the defendant advised the plaintiff that it was closing the Vancouver Global Centre and her employment was terminated, effective December 11, 2020. During that period, the defendant tasked the plaintiff with handling the transfer of the Vancouver Global Centre's operations to company's office in Manila, Philippines, training the Manila staff, terminating the 71 employees whom she supervised in the Vancouver Global Centre, and closing the Centre. [9] By letter dated October 14, 2020, the plaintiff was offered a severance package (the "Severance Package") that included, among its terms, the following: As part of your severance, I am pleased that we are able to refund all SLS contributions that you made in 2020. Based on current information, this is estimated to be $10,692 less applicable taxes. If you wish to access outplacement assistance with a professional advisor, the Company will make the appropriate arrangements and cover the cost. ... While the timing to access this service will, within reason, be up to you, it must be arranged within 15 days of returning the signed release. [...] Attached is a Release form which you will have to execute in order to receive the above noted severance and benefits. We would appreciate receiving the signed [release] no later than December 18, 2020... [10] By email dated November 30, 2020, the plaintiff advised the defendant that she wanted to take advantage of the outplacement assistance offer and asked whether it would be possible for her to start it in the second quarter of 2021. The defendant responded the next day, advising the plaintiff that: As for the outplacement program, while we have been recommending others to participate in the outplacement program in Q1 of 2021, we can accommodate your request to start in the second quarter of 2021. Generally, to start the program, I would provide your contact details to the third party provider, and they will directly contact you for the next steps to get started. 2022 BCSC 881 (CanLII) Okano v. Cathay Pacific Airways Limited Page 4 No further steps were taken by either the plaintiff or the defendant in respect of the plaintiff's participation in the outplacement assistance program. [11] In November 2020, the defendant implemented a third Special Leave Scheme ("SLS #3), pursuant to which the reduction in salaries mandated by SLS #2 were extended for a further six months from January to the end of June 2021. Those affected received one additional week of time off but no NCA. [12] The plaintiff's last day of employment with the defendant was December 11, 2020. She did not accept the severance package that had been offered to her. [13] In early 2021, the plaintiff received the sum of $31,613.72, comprising the basic three-month severance required by the Canada Labour Code, R.S.C. 1985, c. L-2 ("CLC Payment"). This sum included the NCA, but did not include any amount for Pension Contribution. Accordingly, the plaintiff received the equivalent of five month's pay since receiving her notice of termination. She did not receive a Pension Contribution for three of those five months. [14] The plaintiff remains unemployed. Issues [15] The issues for determination by the Court are: a) Is the plaintiff entitled to unpaid wages prior to the termination of her employment in respect of SLS #1 and SLS #2? b) Did the plaintiff take reasonable steps to mitigate her losses? c) Should a contingency discount be applied to reflect the likelihood that the plaintiff will obtain replacement employment prior to the expiry of the notice period? d) What is the reasonable notice period to which the plaintiff was entitled? e) Is the plaintiff entitled to an award of special damages for the cost of outplacement assistance services? 2022 BCSC 881 (CanLII) Okano v. Cathay Pacific Airways Limited Page 5 Analysis a) Is the Plaintiff Entitled to Unpaid Wages Prior to Termination? [16] The plaintiff claims that she is entitled to the payment of $10,692, representing wages she lost when the defendant implemented SLS #1 and SLS #2. The plaintiff says that, although she was officially on leave, she was required to continue to work in her management role. [17] The defendant says that the amount claimed by the plaintiff was not unpaid wages, but rather represented the value of reductions to the plaintiff's salary that were made by agreement and pursuant to a contract of employment dated January 20, 2020, and signed by the plaintiff. That contract stipulated, in relevant part, as follows: Compensation and Benefits: During the Term, you will continue to receive your current compensation and benefits, as they may be amended from time to time. The Company reserves the right to unilaterally remove, suspend, substitute and/or introduce any discretionary or ex-gratia payments and benefits without notice in its sole discretion, and such changes will not constitute a breach of the terms of employment. [18] The plaintiff says that this contract term did not entitle the defendant to unilaterally change her salary. She points to an email dated January 15, 2020, sent to her by the defendant's Vice President People, Americas, five days before the new contract of employment was signed, stating: Dear Colleague, [...] By the end of this week you will receive the new employment letter which you will be asked to sign and return to us by the end of next week. This new letter does not change your salary or benefits and it confirms uninterrupted transition of your employment. The letter does, however, contain more legal language around confidentiality, obligations, intellectual property, application of the law, etc. In exchange for signing this new letter of employment you will be eligible to receive the Ex-Gratia payment in accordance with its terms (up to CA$5,086 or your 2019 basic monthly salary, whichever is less). The payment is expected to be made on February 21, 2020. [Emphasis added.] 2022 BCSC 881 (CanLII) Okano v. Cathay Pacific Airways Limited Page 6 [19] Regardless, the plaintiff's evidence on her examination for discovery is that she accepted both SLS #1 and SLS #2 and did not raise any concerns regarding either of them. She understood that there was no commitment on the part of the defendant to compensate her for any pay reduction under these schemes, other than as set out in the scheme itself. [20] It is clear on the whole of the evidence, and I so find, that the plaintiff accepted SLS #1 and SLS #2 in exchange for her continued employmentwhich was potentially in jeopardy because of the pandemicand that there was no expectation that the reduction in her salary would be reimbursed to her. [21] The defendant's offer as part of the plaintiff's severance package to "refund all SLS contributions" made in 2020 does not constitute a contractual obligation. An unaccepted offer is "a thing writ in water and of no value to anybody": Howard v. Pickford Tool Co. Ld., [1951] 1 K.B. 417 (Eng. C.A.) at 421; Dosanjh v. Liang, 2014 BCSC 162 at para. 51. It confers no legal rights of any sort and cannot be drawn upon to ground an award in damages. [22] I conclude that the plaintiff is not entitled to compensation for unpaid wages prior to her termination. b) Did the Plaintiff Take Reasonable Steps to Mitigate her Loss? [23] The onus is on the defendant to demonstrate the plaintiff has failed to mitigate her loss. The onus is a high one. The defendant must establish both a failure on that part of the plaintiff to take reasonable steps to mitigate her loss and that alternative employment could have been found had she done so: Smith v. Aker Kvaerner Canada Inc. and Kvaerner Power Inc., 2005 BCSC 117 at paras. 31-36; Ensign v. Price's Alarm Systems (2009) Ltd., 2017 BCSC 2137 at para. 47. [24] The duty to "act reasonably" is to take such steps a reasonable person in the dismissed employee's position would take in her own intereststo maintain her income and her position in her industry, trade, or profession: Forshaw v. Aluminex Extrusions Ltd. (1989), 39 B.C.L.R. (2d) 140 (C.A.) at 143-144. 2022 BCSC 881 (CanLII) Okano v. Cathay Pacific Airways Limited Page 7 [25] It is not necessarily a failure to mitigate where a plaintiff has not immediately commenced a job search. Employees should be given a reasonable period of time to process the shock of the termination, plan their next steps with respect to obtaining new employment, and undertake the necessary research and preparation of rsums so they can compete for available positions: Smith at para. 35. [26] The plaintiff submits that the defendant has not discharged its burden to demonstrate her failure to take reasonable steps to mitigate her loss. She points out that the job postings relied on by the defendant do not describe the nature of the position, the required qualifications, or the compensation. [27] The defendant submits that there is ample evidence of employment opportunities that were available to the plaintiff which she failed to investigate and that the notice period ought to be a reduced by three months. [28] The uncontroverted evidence is that the plaintiff loved her job with the defendant. Indeed, it was a significant feature of her identity. There is no question that she was devoted to it and was devastated by the loss of it after almost 35 years of service. It is not surprising that she had significant difficulty coming to terms with her sudden termination. Nevertheless, having been tasked by the defendant with closing the Vancouver Global Center and assisting in the transfer of its operations to Manila, she did so devotedly and successfully. In the circumstances, I find that it is unreasonable to expect the plaintiff to have been proactively searching for a new job at that time. [29] However, having considered the evidence as a whole, I find that the plaintiff did not take reasonable steps to find alternative employment thereafter. I accept her evidence that, in the months following her last day at work, she was sad, unmotivated, and had lost her confidence. She candidly admitted that she did nothing to search for new employment prior to February 2021. In January 2021, she applied for and thereafter received employment insurance benefits. [30] The defendant's evidence is that it would have paid for outplacement assistance services for the plaintiff if she had requested them. The plaintiff's 2022 BCSC 881 (CanLII) Okano v. Cathay Pacific Airways Limited Page 8 evidence is that she did not follow up on the defendant's outplacement assistance services offer because she assumed it was only available if she accepted the defendant's severance package. In the circumstances, I conclude that the defendant has not met its onus of establishing that the plaintiff should have taken advantage of the outplacement assistance services that were offered by it. The defendant should have done more to ensure the plaintiff understood the services were available regardless of whether she accepted the severance package. [31] I find that, during the period February to June 2021, the plaintiff's attempts to find new employment can best be described as "passive". In February 2021, the plaintiff created a rsum and began searching various online job sites for openings. She received several notifications and alerts of job postings but she considered that none of them were suitable for a person of her skill set. [32] In April, May, and June 2021, the plaintiff attended eight sessions with a leadership-coaching consultant for the purpose of building her confidence and helping her to move forward with her job search. She was charged $1,680 plus GST for these services. [33] The plaintiff gave evidence on her examination for discovery that she chose not to apply for any jobs in the airline industry because: I don't have it in me anymore. I put 35 years into the airline industry, and so, at this point in time, I believe, after 35 years, in choosing my next career, I should be able to choose something that I feel I have the heart to do, that I can actually continue down a new career but use the experience that I have, and I would believe that I'm entitled to do that after putting in 35 years in the airline business... [...] I'm not interested in going back into the travel or the airline industry... [34] In June 2021, the plaintiff began to actively apply for jobs outside of the airline industry. To date, she has applied for 50 positions and has received eight interviews, none of which has resulted in an offer of employment. Of those 50 applications, 35 were submitted between June 2021 and March 2022, and 15 were submitted within the last two months. 2022 BCSC 881 (CanLII) Okano v. Cathay Pacific Airways Limited Page 9 [35] The evidence discloses several job postings for positions comparable to the plaintiff's position with the defendant, including one at Air Canada and one at WestJet. The plaintiff was either unaware of these opportunities or chose not to follow up on them because she decided that she had earned the right to look for employment outside of the airline industry. I disagree. In my view, it was incumbent upon the plaintiff to explore available positions in the very industry in which she had spent her entire working career. [36] I agree with defendant's counsel that a reduction in the period of notice is warranted in this case. I find that alternative employment could have been found, including at Air Canada or WestJet, had the plaintiff taken reasonable steps commencing in February 2021 to do so. [37] There will be a reduction in the notice period to which the plaintiff was otherwise entitled of three months. c) Contingency Discount [38] Defendant's counsel submits that there should be a contingency factor applied for the possibility that the plaintiff may secure employment between now and the end of the notice period: Foster v. Kockums Cancar Division Hawker Siddeley Canada Inc. (1993), 83 B.C.L.R. (2d) 207 (C.A.) at paras. 14-16; Matusiak v. IBM Canada Ltd., 2012 BCSC 1784 at paras. 44-46. [39] Counsel has advised that two recent employment prospects remain extant, one with the Insurance Corporation of British Columbia (with whom she had two interviews in March 2022) and one with Lululemon. The plaintiff has no way of knowing whether either prospect will be successful. [40] Despite the lack of success the plaintiff has had in finding employment over the course of the past 17 months since her last day of work, I conclude that there is a real and substantial possibility that she will find a new job commensurate with her qualifications and experience at some point in time during the balance of the notice period. As the defendant points out, there are over 750 jobs listed as available in 2022 BCSC 881 (CanLII) Okano v. Cathay Pacific Airways Limited Page 10 the Vancouver area that appear to be similar in description and title to the position the plaintiff had with the defendant, including customer experience manager at Air Canada, team manager of client care at Telus, and airport customer service supervisor at Strategic Aviation Services Ltd. [41] I have concluded that a contingency discount of 15% on the damages award from the date of hearing to the end of the notice period is warranted in this case. d) What is the Reasonable Notice Period to which the Plaintiff was Entitled? [42] The plaintiff submits that, given her age, length of service, and management status with the defendant, she is entitled to payment of salary in lieu of notice for a period of 24 to 26 months. She relies on the following decisions: a) Ansari v. British Columbia Hydro and Power Authority (1986), 2 B.C.L.R. (2d) 33 (S.C.): 21 months notice for a 50-year-old plaintiff engineer with 19.33 years of service; b) Beach v. Ikon Office Solutions Inc. (1999), 45 C.C.E.L. (2d) 12 (B.C.S.C.): 22 months notice for a 54-year-old sales manager with 28.5 to 31 years service; c) Bauer v. Unitel Communications Inc. (1994), 5 C.C.E.L. (2d) 79 (B.C.S.C.): 24 months for a 54-year-old manager, with a staff of 63 people and 34 years of service; d) Currie v. Nylene Canada Inc., 2021 ONSC 1922: 26 months for a 58-yearold chief operator with 39 years of service; e) Halliday v. Hanover Kitchens (Canada) Inc. (1997), 33 C.C.E.L. (2d) 123 (Ont. Ct. J. (Gen. Div.)): 24 months for a 55-year-old sales manager with 28 years of service; f) MacGillivray v. Telus Communications Inc., 2004 BCSC 1394: 21 months for a 51-year-old sales director with 30 years service; g) Moody v. Telus, 2003 BCSC 471: 24 months for a 51-year-old manager with 29 years of service; h) Sorel v. Tomenson Saunders Whitehead Ltd. (1987), 15 B.C.L.R. (2d) 38 (C.A.): 24 months for a 60-year-old regional vice president with 37 years of service; and 2022 BCSC 881 (CanLII) Okano v. Cathay Pacific Airways Limited Page 11 i) Wilson v. Pomerleau Inc., 2021 BCSC 388: 16 months for a 65-year-old chief estimator with 10 years service (reduced from 17 months for contingency). [43] The defendant submits that a notice period of 18 to 20 months is appropriate in the circumstances, relying on the following decisions: a) Dodge v. Signature Automotive Group Ltd., 2014 BCSC 1452: 17 months (reduced to 14 months for failure to mitigate) for a 59-year-old financial services manager with 20 years of service; b) Goetz v. Instow Enterprises Ltd., 2021 BCSC 709: 18 months (reduced to 15 months for failure to mitigate) for a 53-year-old commercial sales representative with 31 years of service; c) Johnson v. Moncton Chrysler Dodge (1980) Ltd. (1990), 104 N.B.R. (2d) 315 (Q.B. (T.D.)): 20 months (reduced to 15 months for failure to mitigate and further reduced to 12 months on appeal), for a 61-year-old manager with 31 years of service; d) Rowe v. General Electric Canada Inc. (1994), 8 C.C.E.L. (2d) 95 (Ont. Ct. J. (Gen. Div.)): 18 months for a 56-year-old manager with 35 years of service; e) Kerr v. Arpac Storage Systems Corporation, 2018 BCSC 704: 20 months, (reduced to 19 months for contingency) for a 70-year-old occupational health and safety manager with 22 years of service; f) Moore v. Instow Enterprises Ltd., 2021 BCSC 930: 20 months (reduced to 17 months for failure to mitigate) for a 53-year-old senior commercial sales representative with 26.5 years of service; and g) MacBride v. ICG Liquid Gas Ltd. (1992), 47 C.C.E.L. 309 (B.C.S.C.): 20 months for a 59-year-old branch manager with 33 years of service. [44] The plaintiff was a "first line manager" with 71 employees at the Vancouver Global Center. She did not hold a strategic, high-level management or executive role. Her job duties were consistent with those of the manager of a department within a large corporate organization. She was responsible for various supervisors, trainers, and administrators. She reported to the head of customer contact, who in turn reported to the general manager of Global Contact Centres. I find that the plaintiff held a middle-management position with the defendant. 2022 BCSC 881 (CanLII) Okano v. Cathay Pacific Airways Limited Page 12 [45] Our courts have been clear that, absent exceptional circumstances, the upper limit for reasonable notice is 24 months: Ansari at 42. 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: Waterman v. IBM Canada Limited, 2010 BCSC 376 at paras. 20-24, aff'd on other grounds 2011 BCCA 337. [46] In my view, given the plaintiff's age, length of service, and management status with the defendant, this is an appropriate case for the upper limit of 24 months' notice. The plaintiff received only two months' notice. However, as set out above, the notice period is reduced by three months because of the plaintiff's failure to mitigate her losses. Therefore, she is entitled to payment of her salary for 19 additional months (less the CLC Payment). [47] I find that, pursuant to SLS #3, the 7% reduction in the plaintiff's salary would have continued to the end of June 2021 had she received reasonable notice of her termination. [48] I also find that, on the evidence as a whole, if the plaintiff would not have received her $173 NCA in 2021, she would likely have received it in 2022. [49] I also find that the plaintiff would have continued to receive her Pension Contribution during the notice period. [50] Accordingly, the plaintiff is entitled to an award of damages against the defendant in the amount of $168,609.28, calculated as follows: a) Salary for the period of December 2020 to June 2021 ($9,207/month x 7 months): $64,449 b) Salary for the period of July to December 2021 ($9,900/month x 6 months): $59,400 c) Salary for the period of January 2022 to May 15, 2022 (($9,900 + $173)/month x 4.5 months): $45,329 2022 BCSC 881 (CanLII) Okano v. Cathay Pacific Airways Limited Page 13 d) Salary for the period of May 16, 2022 to June 30, 2022 (($9,900 + $173)/month x 1.5 months x 0.85 $12,843 Subtotal: $182,021 Plus: 10% in lieu of Pension Contribution: $18,202 Less: CLC payment received by the plaintiff: ($31,613.72) Total: $168,609.28 [51] The plaintiff is not claiming any compensation for her participation in defendant's health and welfare benefits and insurance plans. e) Cost of Consulting and Coaching Services [52] The plaintiff submits that it was reasonable for her to seek the help of a leadership-coaching consultant to aid in her job search. I accept that, given the plaintiff's unique circumstancesincluding the emotional devastation she suffered as a result of her terminationsuch services were reasonably incurred in mitigation of her damages. [53] The plaintiff is entitled to special damages in the amount of $1,764 (i.e., $1,680 plus 5% GST). Conclusion [54] The plaintiff is entitled to an award of damages against the defendant in the amount of $168,609.28, together with interest pursuant to the Court Order Interest Act, R.S.B.C. 1996, c. 79. [55] The plaintiff is also entitled to an award of special damages in the amount of $1,784 ($1,680 plus 5% GST). 2022 BCSC 881 (CanLII) Okano v. Cathay Pacific Airways Limited Page 14 Costs [56] Subject to any submissions the parties wish to make, the plaintiff is entitled to her costs of this action at Scale B. "G.C. Weatherill J." 2022 BCSC 881 (CanLII)

Instructions:

Identify if there are any counterclaims filed against by the defendant against the plaintiff