A former employee at Cathay Pacific Airways has been awarded nearly $170,000 in wrongful dismissal damages by the Supreme Court of British Columbia after her employment was terminated.
Frances Okano, 61, worked for the airline in Vancouver for almost 35 years – from March 1986 untl December 2020. She spent her entire career in the company’s sales and customer service departments, rising through the ranks from a frontline reservations agent to manager of its Vancouver Global Centre.
Okano was the most senior person in her business unit, with responsibility for budgeting, hiring and firing. She reported directly to Cathay Pacific’s head office in Hong Kong.
COVID devasted business
Okano’s termination came as a result of the COVID-19 global pandemic. The global airline industry suffered a massive downturn as travel came to a halt, which had a “devastating” effect on the employer’s business, the court said.
The airline’s monthly passenger numbers from March to December 2020 were less than one per cent of what they had been for the same period in 2019.
Special leave scheme
Cathay Pacific took several steps to continue operations during this difficult time and to reduce the need for mass employee terminations. In February 2020, it implemented a “Special Leave Scheme” that saw employees receive three weeks’ unpaid leave, which was deducted from their salary over a four-month period from March to June 2020.
Prior to July 2020, Okano was earning a monthly salary of $9,900 plus a non-compounding allowance (NCA) of $173. This payment was compensation for her being at the top of her pay scale and hence not eligible for a pay increase. She also received a monthly pension of 10 per cent of her salary.
In June 2020, Cathay Pacific implemented a second Special Leave Scheme that reduced employee salaries by set amounts. Oksana’s salary was reduced by seven per cent from July to December 2020 to $9,207 plus the NCA and pension contribution.
Employment terminated at Cathay Pacific
On Oct. 13, 2020, the company announced it was closing the Vancouver Global Centre and Okano’s employment was terminated as of Dec. 11, 2020.
Cathay Pacific had Okano handle the transfer of the Vancouver operations to the company’s office in the Philippines, training the staff in Manila and terminating the 71 employees she supervised in B.C.
It offered Okano a package that included a refund of Special Leave Scheme contributions in 2020 (about $10,692). She refused the severance package.
In early 2021, Cathay Pacific paid Okana $31,613.72 – comprising the basic three-month severance required by the Canada Labour Code. It included the NCA, but did not include any amount for pension contribution.
All told, Okano received the equivalent of five-months’ pay since she received notice of termination, but did not receive pension contribution for three of those months.
The court’s ruling
The Supreme Court of B.C. pointed out that courts have been clear that, in the absence of exceptional circumstances, the upper limit for reasonable notice of termination of employment is 24 months.
Given Okano’s age, length of service and management status, it found that 24 months would be appropriate in this case. However, the court reduced the notice period by three months because it found Okano failed to reasonably mitigate her damages by looking for other jobs.
The court lauded her for being professional in transferring work to the Philippines and eliminating the positions in Vancouver.
“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,” the court said.
“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.”
But once the dust settled, the court said Okano didn’t take reasonable steps to find another job.
“She candidly admitted that she did nothing to search for new employment prior to February 2021,” the court said, adding that her attempts to find new work were “passive.”
While Okano didn’t want to work in the airline industry ever again, the court found there were jobs comparable to her former role at both Air Canada and WestJet.
As a result, the court reduced the notice period awarded to her by three months.
Doing the math
The court broke down the award as follows:
- Salary for December 2020 to June 2021 ($9,207 per month for 7 months): $64,449
- Salary for July to December 2021 ($9,900 per month for 6 months): $59,400
- Salary for January 2022 to May 15, 2022 ($9,900 per month plus $173 for 4.5 months): $45,329
- Salary for May 16, 2022 to June 30, 2022 ($9,900 per month plus $173 for 1.5 months): $12,843
The subtotal was $182,021 plus the court added the $18,202 in pension contributions. It the reduced the amount by the $31,613.72 she had already received for the Canada Labour Code payment.
Special damages for leadership coach
It also awarded Okano special damages of $1,764 to pay for a career coach she hired. She attended eight sessions with the leadership-coaching consultant for the purpose of building her confidence and helping her move forward with the job search.
“(Okano) submits that it was reasonable for her to seek the help of a leadership-coaching consultant to aid in her job search,” the court said. “I accept that, given the plaintiff’s unique circumstances—including the emotional devastation she suffered as a result of her termination—such services were reasonably incurred in mitigation of her damages.”
For more information see:
Okano v. Cathay Pacific Airways Limited, 2022 BCSC 881.
