Court Comments on the Impact of COVID-19 on the Appropriate Reasonable Notice Period in the Aviation Industry

Focus Alert readers will recall that in 2021, the Ontario Superior Court of Justice increased the reasonable notice period awarded in a termination case, citing the economic upheaval created by the COVID-19 pandemic in its reasoning. Recently, the court heard another pandemic termination case. Although the court’s decision itself was fairly run-of-the-mill, it nonetheless provides some interesting commentary on how the pandemic might impact the assessment of the reasonable notice period for employees in the aviation industry specifically.

Background

In Williams v. Air Canada, the plaintiff, who had been employed by Air Canada in various capacities since 1996, was one of many employees of the company whose employment was terminated as a result of the onset of the pandemic. At the time of the termination, the plaintiff refused the separation package offered by Air Canada, and instead received only her minimum statutory entitlements under the Canada Labour Code: payment in lieu of notice, severance pay, and all accrued but unused vacation pay.

The plaintiff sued her former employer and brought a motion for summary judgment in which she sought a determination on several issues, including:

  • The appropriate reasonable notice period,
  • Her entitlement to damages for lost group benefits during the reasonable notice period,
  • Her entitlement to damages representing pension contributions during the reasonable notice period,
  • Her entitlement to damages for annual incentive plan and profit sharing plan bonuses paid during the reasonable notice period,
  • Her entitlement to specific performance in respect of Air Canada’s travel privileges program and to receive a 25th anniversary service award, and
  • Whether she had failed to reasonably mitigate her damages. 

Decision

After determining that the case was an appropriate one for summary judgment, Justice Ryan Bell concluded that the appropriate notice period, considering relevant factors such as the plaintiff’s age, education and professional experience, was 24 months. In doing so, she commented at paras. 26 – 27:

[…] For employees of Ms. Williams age, experience and time on the job, and having regard to the character of her employment and the availability of similar employment, the average notice period in the reported cases is in the range of 22 to 24 months: see Brito; Drysdale; Chappell.

Ms. Williams’ employment with Air Canada was terminated as a result of the COVID-19 pandemic. The economic uncertainty caused by the pandemic is a factor that may lengthen an employee’s notice period: Kraft v. Firepower Financial Corp., at paras. 19 and 22. Given the pandemic was the reason for Ms. Williams’ termination and the impact the pandemic has had on the airline industry, in my view, she is entitled to reasonable notice at the higher end of the range. (emphasis added)

Justice Ryan Bell further concluded that the plaintiff was entitled to damages in respect of any incentive plan or profit sharing payments made in the 2021 fiscal year, as well as damages representing pension contributions during the 24-month reasonable notice period. That being said, she did not find that the travel privileges and service award formed part of the plaintiff’s compensation package with Air Canada, and dismissed her claims in that regard.

Finally, Justice Ryan Bell determined that the plaintiff had not failed to reasonably mitigate her damages, having applied to 17 positions and attended educational programs and seminars in an effort to bolster her credentials during her job search before finally securing alternate employment approximately two years following her termination from Air Canada.

 

In Our View

Although it was already clear that, in Ontario at least, the court might increase a reasonable notice period to account for the pandemic and its significant economic impact on society, it is notable that there is now precedent for this specifically in the aviation sector. Aviation employers who had to let employees go during the pandemic and who have not yet resolved all issues related to any of those terminations should therefore be mindful of the Williams decision when assessing the risks and benefits of settlement and/or litigation. 

Given that aviation employers are now facing employee shortages and are finding it difficult to recruit, consideration should be given to two strategies for any ongoing matters. First, employers should consider an offer of re-employment if the circumstances warrant such an approach. Second, and where re-hire is not a viable option, employers should send any and all applicable aviation industry postings to the ex-employee. This second strategy should be part of any employer’s wrongful dismissal defence strategy. 

For more information, contact Steven Williams at 613-940-2737, Lauren Jamieson at 613-404-5058, or Marianne Abou-Hamad at 613-240-2170.

 

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