Court File and Parties

COURT FILE NO.: CV-20-00642676-0000 DATE: 20220404

ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

ROLAND RUEL Applicant – and – AIR CANADA Respondent

Counsel: Robert B. Lilly, for the Applicant Mathias Link and Megan Beal for the Respondent

HEARD: June 26, 2021 and September 23, 2021

A.P. Ramsay J.

Nature of the Motion

[1] As a result of the global pandemic declared in 2020, air travel declined significantly, impacted by travel restrictions in Canada and elsewhere. In a word, the sector was decimated. Airline carriers experienced massive losses and Air Canada was no exception, experiencing the worst financial crises in its eighty-year history. It took measures to stem its losses, including cutting its workforce. The plaintiff was impacted by those measures, dismissed with only two weeks’ notice in the summer of 2020. The plaintiff commenced this action seeking compensation for damages for wrongful dismissal including damages for various benefits, stocks, pension, privileges or alternatively, specific performance where appropriate.

[2] The plaintiff brings this motion for summary judgment under rule 20.04 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, on the basis that there is no genuine issue requiring a trial with respect to his claim for damages. Air Canada opposes the motion.

Overview

[3] Air Canada is a federally regulated corporation and is subject to the Canada Labour Code, R.S.C. 1985, c. L-2. The plaintiff had worked for Air Canada for twenty-four and a half years. At the time of his termination, he was a month shy of his 52nd birthday, and was an executive with managerial responsibilities.

[4] Air Canada provided the plaintiff with a letter dated June 4, 2020, advising him that his employment was terminated effective June 15, 2020. There is no dispute that this is the minimum notice period required under the Canada Labour Code. The plaintiff was offered a severance package which was explained in his termination letter and in Air Canada’s COVID-19 Pandemic Involuntary Separation Program.

[5] The plaintiff declined the package and commenced this action for damages. Air Canada has paid the plaintiff his statutory pay in lieu of notice in the amount of $3,136.51 in addition to the amount owed for statutory service under the Canada Labour Code in the amount of $21,537.19. There is no dispute that no amount has been paid on account of common law notice.

[6] At the time of his termination, the plaintiff’s salary and other compensation consisted of the following:

a. a base salary of $117,060.00; b. a discretionary annual incentive bonus (“AIP”) of $35,000.00; c. participation in Air Canada’s Long-Term Incentive Plan (“LTIP”), whereby shares were issued at a value of 15% of his base salary in 2019 and 20% in 2020 and for the foreseeable future; d. enrollment in Air Canada’s defined benefit pension plan; e. coverage under Air Canada’s health benefits program; f. eligibility for travel privileges including retiree travel privileges upon attaining 25 years of service.

[7] The plaintiff seeks damages for twenty-four months’ reasonable notice, damages for lost bonuses, lost accrual of pension benefits and spousal survivor benefits, lost group health benefits during the notice period, and compensation for various post-retirement benefits, and retiree flight privileges which he claims he would have been entitled to had he received reasonable notice.

The Issues Raised on this Summary Judgment Motion

[8] The following issues are raised on the motion for summary judgment:

i. Is a motion for summary judgment appropriate in the circumstances? ii. If summary judgment is appropriate, what is the reasonable notice period? Should the court impose a contingency or trust on any damages awarded for the unexpired notice period? iii. Did the plaintiff fail to reasonably mitigate his damages? iv. Is the plaintiff entitled to damages for AIP bonuses during the notice period? v. Is the plaintiff entitled to damages for loss of contributions to, vesting of, and accrued value of the restricted share units (“RSUs”) under the LTIP plan during the notice period? vi. Is the plaintiff entitled to damages for a COVID-19 relief bonus and stock award during the notice period? vii. Is the plaintiff entitled to damages for loss of pension benefits and spousal survivor benefits during the notice period? And, if so, is the plaintiff entitled to a gross up on any amount awarded? viii. Is the plaintiff entitled to damages for loss of group benefits during the notice period? ix. Is the plaintiff entitled to damages for lifetime retirement health benefits? x. Is the plaintiff entitled to damages for lost flight privileges or, alternatively, reinstatement in the plan (specific performance)?

Position of the Parties

[9] Both parties dispute the appropriateness for the issues raised in the lawsuit to be determined on a summary judgment motion.

a. The Plaintiff’s Position

[10] The plaintiff indicates in his factum that the parties agree that this is an appropriate case for summary judgment under Rule 20.01 to address all issues raised by this action and further indicate that there are no genuine issues requiring a trial. In fact, this view is not shared by Air Canada. During oral submissions, counsel for the plaintiff argued that Air Canada only raised the appropriateness of the summary judgment motion in its factum. He submits that Air Canada agreed to proceeding with the summary judgment motion, in the absence of completing examinations for discoveries, and by agreeing to various timetables for the motion. Counsel for the plaintiff submits that there were no credibility issues which could not be resolved on the record.

b. Air Canada’s Position

[11] Air Canada opposes the motion on the basis that the action involves the determination of complex questions regarding the plaintiff’s entitlement to various forms of damages and, in the result, the disputes regarding the appropriateness of certain damages raise genuine issues requiring a trial. Counsel for Air Canada submits that the evidentiary record is deficient, fraught with inconsistencies and contradictions, and as a result the issues can only be properly dealt with on viva voce evidence where the court may assess credibility.

[12] Alternatively, Air Canada argues the plaintiff is entitled only to damages for reasonable notice in the range of 16 to 17 months calculated solely based on the plaintiff’s base salary, with a reduction for failing to mitigate his damages. Air Canada argues that all of the plaintiff’s entitlements to any pension, stock options, group and other benefits, and other privileges ended when he was terminated in June 2020 by Air Canada.

[13] Air Canada further submits that the plaintiff has raised claims for damages in his factum which are not pleaded or contained in the Notice of Motion, namely, a claim for a pandemic bonus and flight passes.

i. Is a motion for summary judgment appropriate in the circumstances?

[14] The court shall grant summary judgment if the court is satisfied that there is no genuine issue requiring a trial with respect to a claim or defence: Rule 20.04(2)(a) of the Rules of Civil Procedure; Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87, at para. 34 [Hryniak].

[15] At para. 66, Karakatsanis J., writing for the Court, stated in Hryniak:

On a motion for summary judgment under Rule 20.04, the judge should first determine if there is a genuine issue requiring trial based only on the evidence before her, without using the new fact-finding powers. There will be no genuine issue requiring a trial if the summary judgment process provides her with the evidence required to fairly and justly adjudicate the dispute and is a timely, affordable and proportionate procedure, under Rule 20.04(2)(a).

[16] In Hryniak, the Supreme Court of Canada provided a guideline for motion judges to determine whether a proceeding is appropriate for summary judgment as follows:

i. The court will assume that the parties have placed before it, in some form, all of the evidence that will be available for trial; ii. On the basis of this record, the court decides whether it can make the necessary findings of fact, apply the law to the facts, and thereby achieve a fair and just adjudication of the case on the merits; iii. If the court cannot grant judgment on the motion, the court should: a. Decide those issues that can be decided in accordance with the principles described in paragraph (ii), above; b. Identify the additional steps that will be required to complete the record to enable the court to decide any remaining issues; c. In the absence of compelling reasons to the contrary, the court should seize itself of the matter.

[17] The Supreme Court of Canada has made it clear that if there appears to be a genuine issue requiring a trial, the motion judge must still determine if the need for a trial can be avoided by using the new powers under Rules 20.04(2.1) and (2.2), and may use those powers, provided that their use is not against the interest of justice. The court’s use of the expanded powers under Rule 20.04 will not be against the interest of justice if they will lead to a fair and just result and will serve the goals of timeliness.

[18] Turning to the record before me, the record is extensive and includes affidavit evidence from the plaintiff, the plaintiff’s expert witness and three witnesses on behalf of Air Canada. The witnesses were cross examined on their affidavits and the record is augmented by productions from answers to undertakings stemming from the cross examinations.

[19] There is no dispute that the plaintiff was terminated without notice. There are really no facts in dispute on the material issues. The question on this motion is the appropriate notice period, whether the plaintiff reasonably mitigated his damages, and entitlement, if any, to bonuses, stocks and other benefits or privileges during the reasonable notice period, and, if so entitled, whether the language in associated plans in connection with certain benefits unambiguously take away or limit the plaintiff’s common law right to damages.

[20] Since 2015, the jurisprudence in Ontario has determined that summary judgment is an appropriate means to afford litigants affordable and speedy justice if it is fair to do so on the record. Complexity and the volume of documents are not a basis for determining that a case is not appropriate for summary judgment: Hryniak, at para. 48.

[21] The issue is whether the plaintiff’s damages include an amount to compensate him for various lost benefits, stocks, pension accrual and privileges during the notice period. This in turn turns on the interpretation of various plans and whether the plaintiff’s common law rights have been otherwise unambiguously taken away by language in these plans. Both sides are presumed to have put their best foot forward. The apparent factual dispute is, at its highest, a difference on either side in their interpretation of the evidence. And, as for issues of credibility, Air Canada could point to no genuine issue of credibility requiring a trial. On contentious issues of valuation, if the court were to find entitlement to certain damages, the plaintiff has made concessions. In other respects, Air Canada has agreed with the plaintiff’s valuations but disputes entitlement.

[22] I am therefore confident that I can find the necessary facts and apply the relevant legal principles to fairly determine the issues raised on this summary judgment motion.

ii. What is the reasonable notice period? Should the court impose a contingency or trust on any damages awarded for the unexpired notice period?

[23] The plaintiff seeks damages for reasonable notice. Air Canada submits that the plaintiff’s damages should be in the range of 16 to 17 months.

[24] At common law, an employer may terminate an employment contract without cause subject to the duty to provide reasonable notice: Matthews v. Ocean Nutrition Canada Ltd., 2020 SCC 26, at para. 43 [Matthews]. Dismissal and resignation are reciprocal rights in the contract of employment: Farber v. Royal Trust Co., [1997] 1 S.C.R. 846, at para. 23.

[25] The presumption of reasonable notice at common law is rebuttable if a contract of employment clearly specifies some other period of notice, whether expressly or impliedly: Machtinger v. HOJ Industries Ltd., [1992] 1 S.C.R. 986 [Machtinger].

[26] It is well established that where an employee is dismissed without notice and without payment, the employee may sue for damages for breach of contract to either expressly or implicitly provide reasonable notice or salary in lieu of notice.

[27] There is no dispute that the plaintiff was hired with Air Canada for an indefinite term. There is no written employment agreement. There are written plans (discussed below) with respect to certain benefits.

[28] The remedy for a breach of the implied term to provide reasonable notice is an award of damages based on the period of notice which should have been given, with the damages representing "what the employee would have earned in this period": Wallace v. United Grain Growers Ltd., [1997] 3 S.C.R. 701, at para. 115 [Wallace]; Matthews, at para. 49; Sylvester v. British Columbia, [1997] 2 S.C.R. 315 [Sylvester].

[29] As stated by Kasirer J. in Matthews, at para. 59: “The purpose of damages in lieu of reasonable notice is to put the employee in the position they would have been in had they continued to work through to the end of the notice period” (emphasis added).

[30] In determining the length of notice, the starting point is the enumeration of factors identified in Bardal v. The Globe and Mail Ltd. (1960), 24 D.L.R. (2d) 140 (Ont. H.C.), at p. 145 [Bardal], which include: the character of the employment; the length of service; the age of the employee; and the availability of similar employment, having regard to the plaintiff’s experience, training and qualifications. In Machtinger, the Supreme Court acknowledged that the Bardal factors are the most frequently cited.

[31] At the time of his termination, the plaintiff was one month shy of his 52nd birthday. The jurisprudence establishes that generally, a longer notice period is justified for older long-term employees who may be at a competitive disadvantage in securing new employment because of their age: McKinney v. University of Guelph, [1990] 3 S.C.R. 229, at p. 299. At first blush, the plaintiff’s tenure of twenty-four and a half years, and approaching 52 years of age, appear to justify a longer notice period.

[32] An employee’s length of service is an important factor in the determination of reasonable notice: Bullen v. Proctor & Redfern Ltd., at para. 21 [Bullen]. The plaintiff had been employed with Air Canada for over 24 years, from February 1996 to June of 2020.

[33] The fact that the plaintiff has worked for one employer for so long may impact his employability. As observed by this court: “having served one employer for such a lengthy period of time, a potential new employer may view that individual as rather set in his ways and not as adaptable to change”: Drysdale v. Panasonic Canada Inc., 2015 ONSC 6878, at para. 14 [Drysdale]; Stephanie Ozorio v. Canadian Hearing Society, 2016 ONSC 5440, at para. 16.

[34] The character of the plaintiff’s employment is also an important factor in the determination of an appropriate notice period. The plaintiff was a director with managerial responsibilities at Canada’s largest airport. At the time of his termination, the plaintiff’s job entailed considerable responsibility in a comparatively specialized industry. The plaintiff was responsible for overseeing 3500 Air Canada employees, including a team of 45 management operations professionals. He was responsible for Air Canada’s operations center at Pearson International Airport, which regularly saw up to 50,000 passengers on any given day. He was the primary point of contact for all Air Canada projects with the Greater Toronto Airports Authority, Canadian Air Transport Security Authority, Canadian Border Services Agency, and U.S. Customs and Border and Protection. It was his responsibility to ensure that safety, security, and service standards were being met and he was the designated representative in emergency situations.

[35] A longer notice period may be justified for senior management employees or highly skilled and specialized employees: Cronk v. Canadian General Insurance Co. (1995), 25 O.R. (3d) 505 (C.A.) [Cronk]; Waterman v. IBM Canada Limited, 2010 BCSC 376, at paras. 20, 22, aff’d on other grounds 2011 BCCA 337, aff’d 2013 SCC 70; Teitelbaum v. Global Travel Computer Holdings Ltd. (1999), 41 C.C.E.L. (2d) 275 (Ont. Gen. Div.); Bernier v. Nygard International Partnership, 2013 ONSC 4578, 9 C.C.E.L. (4th) 41, at para. 58. On the record before me, the plaintiff’s job, at the time of his termination, entailed senior management duties and significant responsibilities justifying a longer notice period.

[36] The Bardal factors are not exhaustive. A downturn in the economy or in a particular industry or sector of the economy which would indicate that the plaintiff may have difficulty finding another position may justify a longer notice period: Summerfield v. Staples Canada Inc., 2016 ONSC 3656, 33 C.C.E.L. (4th) 249, at para. 12; Bullen, at paras. 24-29.

[37] While judicial notice could probably be taken of the impact of the global pandemic on the airline industry, Air Canada’s own witness, Ms. Brunelle, admitted on cross examination that the “airline industry has been decimated by COVID”, and she did testify that she did not know when operations were expected to normalize. Ms. Brunelle conceded on cross examination that COVID-19 had “significantly limited Mr. Ruel’s prospects of reemployment in the airline industry”. However, at paragraph 26 of its factum, Air Canada indicates:

Having regard to the Plaintiff’s (i) position as Director, Customer Experience – Station Operations Control; (ii) approximately 24.3 years of service; and (iii) 51 years of age at the time of termination, as well as the availability of similar employment given Mr. Ruel’s skillset, experience, and qualifications, Air Canada submits that the reasonable notice period in the circumstances is between 16 and 17 months.

[38] I agree with the plaintiff that even without taking into account the pandemic, the plaintiff’s age, nearly 25 years of service, and level of responsibility in his director position, justifies a 24 month notice period: Irvine v. Jim Gauthier Chevrolet Oldsmobile Cadillac Ltd., 2013 MBCA 93, 367 D.L.R. (4th) 436; Brien v. Niagara Motors Ltd. (2008), 68 C.C.E.L. (3d) 229 (Ont. S.C.), varied on other grounds, 2009 ONCA 887; Lowndes v. Summit Ford Sales Ltd. (2006), 47 C.C.E.L. (3d) 198 (Ont. C.A.); Halliday v. Hanover Kitchens Inc. (1997), 33 C.C.E.L. (2d) 123 (Ont. Gen. Div.); Cardenas v. Canac Kitchens, [2009] O.J. No. 1570 (S.C.).

[39] On the record before me, a 24-month notice period is warranted. The plaintiff has been with Air Canada for much of his adult life with a lengthy period of employment. He was in a senior management position. There has been a significant downturn in the air travel sector. Air Canada’s own witness acknowledged it was “decimated” by the pandemic. The plaintiff is in his early fifties with experience, training, and qualifications in the airline industry, which was impacted by the global pandemic. Air Canada’s own witness (Ms. Brunelle) admitted that the COVID-19 pandemic has significantly limited the plaintiff’s prospects of re-employment in the airline industry. Although the plaintiff’s skills and experience are transferrable, he is at a competitive disadvantage as prospective employers may perceive that he is set in his ways given his lengthy employment with Air Canada.

[40] I do agree with Air Canada that as the plaintiff has an ongoing duty to mitigate, the plaintiff should account for any income earned during unexpired portion of the notice period, following the court’s decision. I would reject Air Canada’s request for a partial summary judgment on this issue. In Cronk, the Ontario Court of Appeal upheld a 20-month notice award granted on a summary judgment motion, only nine months after the plaintiff was terminated.

[41] I would adopt the trust and accounting approach endorsed by Lederman J. in Drysdale. Air Canada shall pay to the plaintiff all monies owing up to the release of this decision. The balance owing for the months of April, May and June shall be paid to the plaintiff’s counsel in trust, to be paid to the plaintiff monthly until June 2022, subject to an accounting and adjustment for any earnings by the plaintiff until expiry of the notice period.

[42] Given the plaintiff’s age, competitive disadvantage, and the likelihood of re-employment within the notice period, I decline to discount the damages on the basis of any contingency.

iii. Did the plaintiff fail to reasonably mitigate his damages?

[43] Air Canada submits that there is a two-and-a-half-month gap in the plaintiff’s mitigation chart where he did not apply for any jobs and blames this on the plaintiff’s decision to move his family from Ontario to British Columbia. Air Canada also argues that the plaintiff’s job search was too limited, for example by focusing on jobs with four weeks’ vacation, and further restricted by his decision to move to a small town across the country. Air Canada seeks a reduction in the notice period for failure to mitigate.

[44] The plaintiff points to the 104 jobs that he applied to in the space of 12 months, not only across Canada, but outside the country. He took advantage of Air Canada’s six month out-placement career counselling. He points to the job he applied to in November 2020, and his almost daily online search for jobs, even while he was moving across the country. His job search yielded three interviews, but no placement.

[45] The onus is on the defendant to establish a failure to mitigate: Michaels v. Red Deer College, [1976] 2 S.C.R. 324 [Michaels]; Dobson v. Winton & Robbins Ltd., [1959] S.C.R. 775.

[46] That is, the onus is on the employer to prove that had the employee taken reasonable steps, he would have found “a comparable position reasonably adapted to his abilities”: Link v. Venture Steel Inc., 2010 ONCA 144, 259 O.A.C. 199, at para. 73; H.A. Levitt, The Law of Dismissal in Canada, loose-leaf, 3rd ed. (Aurora: Canada Law Book, 2003), at p. 10-3; Roderick Wood, Geoffrey England, & Innis Christie, Employment Law in Canada, loose-leaf, 4th ed. (Markham: LexisNexis Canada Inc., 2005), at p. 16-89.

[47] The courts are tolerant in evaluating the employee’s efforts at mitigation, and the mitigation efforts need only be reasonable, not perfect: Summerfield v. Staples Canada Inc., 2016 ONSC 3656, at paras. 20-21; Banco de Portugal v. Waterlow & Sons Ltd., [1932] A.C. 452 (H.L.). The employer must show that the employee’s conduct was unreasonable, not in one respect, but in all respects: Furuheim v. Bechtel Canada Ltd. (1990), 30 C.C.E.L. 146 (Ont. C.A.), at para. 3 [Furuheim].

[48] As accepted by Laskin C.J. in Michaels, at p. 332:

It seems to be the generally accepted rule that the burden of proof is upon the defendant to show that the plaintiff either found, or, by the exercise of proper industry in the search, could have procured other employment of an approximately similar kind reasonably adapted to his abilities, and that in absence of such proof the plaintiff is entitled to recover the salary fixed by the contract.

[49] The plaintiff’s evidence regarding his mitigation efforts is uncontradicted. The record shows that the plaintiff’s job search was far and wide. I am mindful that the plaintiff’s move as well as his job search took place during the pandemic with unprecedented provincial restrictions and lockdowns.

[50] There is not a scintilla of evidence on the record from Air Canada on any comparable jobs in Ontario or across Canada that were available in the 2.5 months complained of that the plaintiff could have applied for but did not. In contrast, the evidence before the court indicates a dogged and consistent reasonable effort by the plaintiff to apply to jobs since his termination: six months of job counselling; online searches through Indeed and Linkedin, almost on a daily basis; 104 jobs applied to within the space of 12 months across Canada and outside the country; and three interviews, all uncontradicted. His efforts need not be perfect.

[51] In Corso v. Nebs Business Products Limited, at para. 73, G. R. Strathy J., as he then was, commented that: “Although the plaintiff was slow off the mark in his efforts to mitigate his damages, I am not satisfied that this resulted in the loss of opportunity, given that some two years later he is without work.” Those statements could well apply to the current situation. Some twenty-one months later the plaintiff has still not found a job. Air Canada has put forward no evidence of comparable jobs that the plaintiff could have applied to but has failed to do so.

[52] The onus on Air Canada is “by no means a light one”: Yiu v. Canac Kitchens Ltd., at para. 16. Especially considering the pandemic, at least some evidence was required from Air Canada to show what comparable positions were out there that the plaintiff could have applied to but did not. The plaintiff’s evidence in the circumstances that he continued to look for a job but did not apply because there were fewer jobs remains uncontradicted. Air Canada has not shown that the plaintiff’s conduct was unreasonable in all respects: Furuheim.

[53] Air Canada is obliged to put its best foot forward. The court assumes Air Canada has put before the court all the evidence that it would advance at trial. It has failed to put forward any evidence whatsoever to show there were comparable jobs during the 2.5 month period complained of, suitable for the plaintiff, which he failed to apply to in order to mitigate his damages. On the record, I find that that Air Canada has not discharged the onus of showing that the plaintiff failed to mitigate his damages. There is no genuine issue requiring a trial on the issue of mitigation.

iv. Is the plaintiff entitled to damages for AIP bonuses during the notice period?

[54] Prior to the termination, the plaintiff was eligible to participate in Air Canada’s Annual Incentive Plan (“AIP”), and Long-Term Incentive Plan (“LTIP”). Air Canada submits that the plaintiff is not entitled to a 2020 bonus or any bonus during the notice period as the plaintiff’s participation in the AIP was contingent upon him being “actively” employed by Air Canada and performing his duties on the payout date. Air Canada argues the AIP expressly stated that employees are not entitled to continue participation in the AIP after the Termination Date. In the alternative, Air Canada submits that the plaintiff is not entitled to an AIP bonus in 2020, and points to the fact that the plaintiff has adopted Air Canada’s evidence that no AIP bonus was paid in 2020.

[55] The plaintiff submits that the language in the plan is unilateral. The plaintiff argues that the language does not unambiguously take away the plaintiff’s rights and further, argues that the court should favour an interpretation of the Canada Labour Code that obliges the employer to comply with the minimum statutory requirement of the Code.

[56] The AIP, updated February 2020, prior to the plaintiff’s termination, indicates that it “provides another layer of potential earnings”. According to the plan, that layer of earnings was “based on your individual, your branch and the company's performance.” Fifty percent of an employee’s AIP award was determined based on the company's annual financial results and the remaining fifty percent was based equally on the employee’s branch performance and the individual performance.

[57] Air Canada submits the terms of the plan unambiguously alter or remove the plaintiff’s common law right to continue participating in the AIP after the “Termination Date”, defined below.

[58] With respect to the treatment of the AIP upon termination, the AIP states:

Events Impact on AIP Resignation, Retirement, termination without cause and termination for cause If you are no longer an employee performing your employment duties on the payout date, you will not be eligible for payout of the AIP award. All entitlements, if any, under the AIP that are unpaid on your Termination Date (as defined below), shall be cancelled, and no entitlement will be granted after your Termination Date, except only to the extent otherwise required by the Canada Labour Code.

[59] The AIP provides the following definition of the “Termination Date”:

For the purposes of the AIP “Termination Date” means the latter of the date you notify Air Canada or Air Canada notifies you of the immediate termination of your employment (including retirement) or the last day on which you are required to perform your employment duties. The 'Termination Date' is not extended by any entitlement to a notice of termination of employment under statute, contract, the common law, or an order of a court or tribunal.

[60] A wrongfully terminated employee is entitled to be compensated for “all losses arising from the employer’s breach of contract in failing to give proper notice”: Paquette v. TeraGo Networks Inc., 2016 ONCA 618, 352 O.A.C. 1, at para. 16 [Paquette]; Peet v. Babcock & Wilcox Industries Ltd. (2001), 53 O.R. (3d) 321 (C.A.), at para. 34 [Peet].

[61] The purpose of damages is to place the employee in the same financial position they would have been in had such notice been given: Sylvester, at para. 1.

[62] The court will typically compensate the wrongfully terminated employee for all losses and benefits that the employee would have earned or received during the notice period: Davidson v. Allelix Inc. (1991), 7 O.R. (3d) 581 (C.A.) [Davidson]; Sylvester, at para. 1.

[63] The jurisprudence establishes that such compensation includes the loss of pension benefits: see, Taggart v. Canada Life Assurance Co., 2006 C.L.L.C 210-007 (Ont. C.A.) [Taggart]; the loss of bonuses: see, Paquette; the loss of stock options or other incentives: see, O'Reilly v. IMAX Corporation, 2019 ONCA 991, 59 C.C.E.L. (4th) 175 [O’Reilly], Kieran v. Ingram Micro Inc., [2001] O.J. No. 4318 (S.C.), and Gryba v. Moneta Porcupine Mines Ltd. (2000), 139 O.A.C. 40 (C.A.), leave to appeal refused, [2001] S.C.C.A. No. 92.

[64] The AIP is ambiguous. It potentially provides two events which would prevent an employee from continuing in the plan. It provides that if an employee is “no longer an employee performing your employment duties on the payout date, you will not be eligible for payout of the AIP award”. There is no definition of “payout date”, but the evidence of Ms. Brunelle, for Air Canada, is that the AIP bonus is normally paid in March of each year. Thus, based on the plain meaning of the words in the AIP, the plaintiff would be eligible for the 2020 AIP but not the 2021 AIP, even if the “payout date” occurred within the period of notice. As for the “termination date”, it is tethered to several events and the plan provides that it is the latter of the date “Air Canada notifies you of the immediate termination of your employment” or “the last day on which you are required to perform your employment duties”. It is not clear what is meant by the inclusion of “immediate”; in this case the plaintiff was given two weeks’ notice. Moreover, conceivably, had the plaintiff been given working notice, the last day on which he would be required to perform his employment duties would be the end of the notice period, and therefore would be “entitled” to the receive the AIP.

[65] In Consolidated-Bathurst Ltd. v. Mutual Boiler & Machinery Insurance Co., [1980] 1 S.C.R. 888, the Supreme Court cited with approval the following passage in Cheshire and Fifoot’s Law of Contract (9th ed.), at pp. 152-3:

If there is any doubt as to the meaning and scope of the excluding or limiting term, the ambiguity will be resolved against the party who has inserted it and who is now relying on it. As he seeks to protect himself against liability to which he would otherwise be subject, it is for him to prove that his words clearly and aptly describe the contingency that has in fact arisen.

[66] Any ambiguity should be construed in favour of the plaintiff who had no hand in drafting the plan.

[67] There is however, a more fundamental concern with Air Canada’s submissions. Had the plaintiff been given common law notice, he would have remained “full-time” and “actively” employed and received a salary and benefits within the common law notice period. As stated recently by the Supreme Court of Canada in Matthews, at para. 66: “Yet, it bears repeating that, for the purpose of calculating wrongful dismissal damages, the employment contract is not treated as ‘terminated’ until after the reasonable notice period expires” (emphasis added). The language of the plan therefore does not unambiguously take away the plaintiff’s common law right to any AIP he would have received during the common law notice period.

[68] The court also agrees with the plaintiff that the plan appears to exclude the AIP payment over the statutory notice period by defining “Termination Date” as “not extended by any entitlement to notice of termination of employment under statute”.

[69] On the record, the AIP bonus is normally paid in March of each year. Had Air Canada paid any AIP in 2020 or 2021, in my view, the plaintiff would be entitled to be compensated for the loss of the bonus in each of those two years, as the payment would fall within the notice period, if in fact the AIP was paid in each of those two years. The AIP is discretionary as it is tied to profitability of the company among other things. Air Canada’s evidence that it paid no AIP in 2020 is unchallenged by the plaintiff. On the record before me, at the end of 2020 Air Canada was operating at a $3.8 billion loss. Air Canada forecasts that its adjusted pre-tax income will likely be negative for fiscal year 2021 and claims that it is likely that no AIP payments will be made in 2021. In fact, Ms. Brunelle testified that Air Canada would only know in February 2022 whether bonuses would be paid out for 2021.

[70] Given my determination, I need not address the plaintiff’s alternative argument that the Canada Labour Code is remedial legislation, intended to protect the interests of employees, and urging this court to favour an interpretation as articulated by the Supreme Court of Canada in Machtinger, at p. 1003, that "encourages employers to comply with the minimum requirements of the Act" and "extends its protections to as many employees as possible". In Machtinger, the court was addressing the provincial statute and a termination clause in an employment agreement.

[71] Given the equivocal nature of Air Canada’s evidence regarding whether the AIP will be paid in 2021, the court orders that the plaintiff is entitled to the AIP bonus for 2021, if paid, by Air Canada, and to the extent that further evidence is required, this aspect of the claim, which is minor, may be dealt with subsequently by way of a summary trial pursuant to Rule 20.05(2).

v. Is the plaintiff entitled to damages for loss of contributions to, vesting of, and accrued value of the restricted share units (“RSUs”) under the LTIP plan during the notice period?

[72] The plaintiff submits that he is entitled to damages for loss of contributions to, vesting of, and accrued value of the restricted share units (“RSUs”) under the LTIP plan. The plaintiff submits that the provision of the plan does not unambiguously take away his common law rights and that the LTIP violates the Canada Labour Code by excluding LTIP accrual during the statutory notice period.

[73] Air Canada’s position is the LTIP shares stop accruing and vesting on the date of termination and are calculated on a prorated basis as of the termination date. Air Canada submits that the language of the LTIP plan limits vesting of RSUs to periods of active service. It submits that the plaintiff is not entitled to have unvested RSUs vest in full following the Termination Date.

[74] In general, the case law under the previous heading is applicable to the determination of the plaintiff’s entitlement, if any. Based on the jurisprudence, the plaintiff’s right to common law damages for breach of the contract, that is a failure of the employer to give reasonable notice, give rise to damages for anything he would have earned over the notice period: Andros v. Colliers Macaulay Nicolls Inc., 2019 ONCA 679, 437 D.L.R. (4th) 546 [Andros]. Had Air Canada given proper notice, the plaintiff would have continued to accrue his LTIP benefits over the common law notice period, unless that right was unambiguously taken away by the LTIP plan.

[75] A term that requires active employment when the bonus is paid, without more, is not sufficient to deprive an employee terminated without reasonable notice of a claim for compensation for the bonus he or she would have received during the notice period, as part of his or her wrongful dismissal damages: Matthews, at para. 65; Paquette, at para. 47.

[76] On cross examination, Air Canada’s witness admitted that the LTIP was a term or condition of the plaintiff’s employment. She admitted that the LTIP plan did not include a provision which permits the accrual and continued vesting during the statutory notice period. The plaintiff also points to Ms. Brunelle’s admission that there was no language in the LTIP which made it “subject to the CLC” or “except as required by the CLC” in the LTIP.

[77] The LTIP wording provides the following in the event of an employee being terminated without cause:

Events Vesting of Share Units* and Payment Limitations Termination without cause Prorated number of vested share units at the end of their term based on: i) the total number of completed months of active service during the share unit term, divided by ii) the total number of months in the share unit term

[78] In Matthews, the Supreme Court of Canada reiterated that an employee, terminated without notice, is entitled to bonuses and other compensation the employee would have earned during the common law notice period, subject to any removal or restriction of the employee’s common law rights by unambiguous language in any agreement, contract or plan.

[79] The jurisprudence has established that where the LTIP is a “unilateral contract”, that is, the parties did not negotiate its terms (as in this case), the principle of contractual interpretation that clauses excluding or limiting liability will be strictly construed “applies with particular force”: Matthews, at para. 64; Hunter Engineering Co. v. Syncrude Canada Ltd., [1989] 1 S.C.R. 426, at p. 459.

[80] In Matthews, the Supreme Court provided a guideline for determining whether compensation for bonuses or other benefits should be included in damages awarded for wrongful dismissal. The first step is to consider the common law right of the plaintiff and determine whether, but for the dismissal, the plaintiff would be would have been entitled to the bonus or benefit as part of their compensation during the reasonable notice period. The second step is for the court to consider whether the common law right of the plaintiff is unambiguously taken away or limited by the employment contract. In Matthews, at para. 65, the court noted that the provisions of the agreement must be “absolutely clear and unambiguous. So, language requiring an employee to be ‘full-time’ or ‘active’… will not suffice to remove an employee’s common law right to damages”: see also Paquette, at para. 47.

[81] As the Supreme Court noted in Matthews, the employment contract is not treated as “terminated” until after the reasonable notice period expires. The plaintiff would have therefore continued to accrue his LTIP award during the notice period. Therefore, at common law, the plaintiff is entitled to any accrued LTIP shares over the common law notice period.

[82] The Supreme Court has made it clear that the exclusion clauses “must clearly cover the exact circumstances which have arisen”: Bauer v. Bank of Montreal, [1980] 2 S.C.R. 102, at p. 108; Matthews, at para. 66. Air Canada can point to no provision in the LTIP plan which provides that an employee is not eligible to accrue LTIP shares during the common law notice period. I agree with the plaintiff that the provisions of the LTIP plan do not sufficiently deprive the plaintiff of his common law entitlements.

[83] In my view, based on Matthews, the language in the LTIP does not unambiguously take away the plaintiff’s right to the accrual of the LTIP shares during the common law notice period.

[84] In the circumstances, the plaintiff’s LTIP entitlements should be calculated on a pro-rated basis at the end of the common law notice period as if he was provided with working notice.

[85] Given my determination above, I need not consider the plaintiff’s second argument.

vi. Is the plaintiff entitled to damages for a COVID-19 relief bonus and stock award during the notice period?

[86] The plaintiff learned from a Globe & Mail article that Air Canada paid out $10 million in bonuses while it received government funding. The plaintiff sought details about the bonus at the cross examination of one of Air Canada’s witnesses, Ms. Brunelle, on her affidavit. Ms. Brunelle admitted on cross examination that the article about executives and managers receiving $10 million in COVID-19 pandemic mitigation bonuses and other special stock awards was partly true. She stated that it was very difficult to say whether the plaintiff would have received any of the awards had he continued working. Air Canada refused to provide any information on the criteria used and whether the plaintiff could have potentially received the bonus the year it was paid out, or to provide particulars of bonuses paid out at the plaintiff’s level. It took the position that the questions were not relevant as the plaintiff did not plead entitlement to this bonus or amend his Notice of Motion.

[87] The plaintiff contends that it is up to this court to determine whether the plaintiff would have been entitled to the COVID-19 bonus as part of his common law compensation during the notice period or, alternatively, has urged the court to make an adverse inference on Air Canada’s failure to answer the questions and find that the plaintiff’s 2019 bonus of $35,000.00 would have been paid to him from the $10 million paid out to employees and directors, and further infer that Air Canada will be in a better financial position with government funding to pay out his 2021 bonus.

[88] The remedy for a breach of the implied term of an employment contract to provide reasonable notice is an award of damages based on the period of notice which should have been given, with the damages representing “what the employee would have earned in this period”: Wallace, at para. 117; Matthews, at para. 49.

[89] In Matthews, at para. 54, Kasirer J., who spoke on behalf of the court, endorsed the approach taken by the Ontario Court of Appeal in Paquette, stating: “the contract effectively ‘remains alive’ for the purposes of assessing the employee’s damages, in order to determine what compensation, the employee would have been entitled to but for the dismissal” (citations omitted). Kasirer J. stated, at para. 53:

I agree with van Rensburg J.A. that this is the appropriate approach. It accords with basic principles of damages for constructive dismissal, anchoring the analysis around reasonable notice. As the court recognized in Taggart, and reiterated in Paquette, when employees sue for damages for constructive dismissal, they are claiming for damages as compensation for the income, benefits, and bonuses they would have received had the employer not breached the implied term to provide reasonable notice. [Emphasis added.]

[90] What is the approach to be taken? The court must follow the Paquette two-step approach endorsed by Canada’s highest court. The first step is to consider the plaintiff’s common law rights, that is whether the plaintiff would have been entitled to the bonus during the notice period, but for the termination: Paquette, at para. 30. Second, the court should determine whether there is something in the bonus plan that would specifically remove the plaintiff’s common law entitlement: Paquette, at para. 31. “The question”, van Rensburg J.A. explained, “is not whether the contract or plan is ambiguous, but whether the wording of the plan unambiguously alters or removes the [employee’s] common law rights”: Paquette, at para. 31; Matthews, at para. 51. Kasirer J. summarized it thus, at para. 55:

Courts should accordingly ask two questions when determining whether the appropriate quantum of damages for breach of the implied term to provide reasonable notice includes bonus payments and certain other benefits. Would the employee have been entitled to the bonus or benefit as part of their compensation during the reasonable notice period? If so, do the terms of the employment contract or bonus plan unambiguously take away or limit that common law right?

[91] As noted by Kasirer J. in Matthews, at para. 59: “The purpose of damages in lieu of reasonable notice is to put the employee in the position they would have been in had they continued to work through to the end of the notice period.” If Air Canada had given the plaintiff proper notice, he would have remained a full-time employee: Wallace, at para. 70. Ms. Brunelle’s answer was equivocal as to whether the plaintiff would have been entitled to any awards had he continued to work, and it is assumed, on a summary judgment motion, that the parties have put their best foot forward.

[92] The bonus was paid to employees and directors, and at the time of his termination, the plaintiff was a director. I agree with the plaintiff that an adverse inference may be made that the plaintiff would have been eligible for the COVID bonus, which was approved by the board during the notice period. Having made this inference, and dealing with the second step, I note that Air Canada has not put forward any evidence to indicate that the plaintiff’s common law rights were taken away. The plaintiff’s damages should reflect the lost opportunity: Matthews, at para. 70. The quantum of the bonus though is not known, and I am not inclined to infer that the amount would be the same as the AIP bonus.

[93] I would dismiss Air Canada’s argument that the COVID-19 bonus has to be specifically pleaded given the nature of the action, the relief already sought in the statement of claim, and the relief sought in the Notice of Motion. I agree with counsel for the plaintiff that the degree of specificity being demanded by Air Canada is not warranted. As stated by Kasirer J. in Matthews, at para. 53: “when employees sue for damages for constructive dismissal, they are claiming for damages as compensation for the income, benefits, and bonuses they would have received had the employer not breached the implied term to provide reasonable notice”. And, at para. 66: “Yet, it bears repeating that, for the purpose of calculating wrongful dismissal damages, the employment contract is not treated as ‘terminated’ until after the reasonable notice period expires.” The plaintiff in fact sought, in his pleadings, damages for all entitlement over the common law notice period. Air Canada should not benefit from its own failure to disclose to the plaintiff’s counsel the existence of the COVID-19 bonus and the particulars of the bonus. Air Canada’s witness, Ms. Brunelle, was cross examined on the issue and ultimately refused to answer all questions, some of which, appear to be relevant to this court’s determination of the plaintiff’s entitlement to the COVID-19 bonus during the notice period.

[94] This is a discrete issue which may also be addressed subsequently by way of a summary trial pursuant to Rule 20.05(2).

vii. Is the plaintiff entitled to damages for loss of pension benefits and spousal survivor benefits during the notice period? And, if so, is the plaintiff entitled to a gross up on any amount awarded?

[95] The plaintiff advances the same arguments to support his claim with respect to his entitlement to loss of pension value over the notice period, that is that his common law rights were not unambiguously taken away, and that the Air Canada Pension Plan violates s. 230(1)(a) of the Canada Labour Code as it disallows pension accrual over the statutory notice period.

[96] The plaintiff is seeking compensation for the loss of pension accrual during the notice period. The plaintiff’s expert valued his net loss of pension benefits at $149,531.00 and $160,148.00 before and after tax gross-up, respectively. Mr. Jeffrey valued the plaintiff’s net loss of spousal survivor benefits at $23,859.00 and $27,629.00 before and after tax gross-up, respectively.

[97] Air Canada concedes that these figures are accurate. Air Canada however disputes the plaintiff’s entitlement to pension benefits or any gross up.

[98] Air Canada has admitted that the plaintiff’s participation in its Pension Plan was a term and condition of the plaintiff’s employment. Air Canada’s pension accrual ends immediately on the date of termination without two weeks of accrual and there is no provision in the plan which provides that it is subject to the Canada Labour Code.

[99] However, on this motion Air Canada argues that the terms of the Pension Plan are clear and do not allow for the inclusion of amounts payable subsequent to termination of service in the calculation of pension benefits and spousal survivor benefits. Air Canada’s Pension Plan calculates an employee’s monthly pension benefit based on “Allowable Service”, which it submits is credited for any month during which the employee is employed by Air Canada for which “Compensation” is paid.

[100] The plan indicates that “Compensation” excludes “any amounts payable subsequent to or on account of” the “termination of service” (the term used in the Air Canada factum) or the “Termination of Employment” (the term used in the Pension Plan). Air Canada submits that the plaintiff accrued Allowable Service from his date of hire until the “Termination Date”.

[101] The plan provides that: “‘Termination of Employment’ means the cessation of Continuous Service which is not the result of retirement as determined in Section 5 nor the result of death.”

[102] And, the relevant provision of the Pension Plan defines “Continuous Service”, in part as follows:

"Continuous Service" means the period of time during which an Employee is in the Company's service beginning with the date of his last hiring and ending on the earliest of his Retirement Date, the date of his death or the date of Termination of Employment without regard to periods of temporary interruption of Membership or employment, but an Employee who terminates employment and is later re-employed by the Company shall be considered a new Employee. Continuous employment has the same meaning as Continuous Service.

[103] The controlling case is the Supreme Court of Canada’s case of Matthews which endorsed the two-part test set out by the Ontario Court of Appeal in Taggart. As a result of Matthews, it is now well established that at common law, an employee terminated without notice is entitled to damages for the loss of pension benefits that would have accrued had the employee worked until the end of the notice period.

[104] There must be clear and unambiguous contractual terms limiting a plaintiff’s right to pension accrual over the notice period: Taggart, at para. 14. On cross examination, Ms. Lavoie, Air Canada’s witness conceded, if implicitly, that there was ambiguity in the language plan. For instance, the Pension Plan provides for “any amount payable subsequent to or on account of the termination of service”. On cross examination, Ms. Lavoie conceded that “termination of service could very well mean the end of that working notice period”. She agreed that if the plaintiff had been provided with six months of working notice, his compensation and service would have qualified under the Pension Plan.

[105] There is no provision in the Air Canada Pension Plan that unambiguously states that an employee is not entitled to pension accrual during the common law notice period. The provision of the Pension Plan “must be absolutely clear”: Matthews, at para. 65. In fact, Air Canada’s witness, Ms. Lavoie, admitted on cross examination that there was nothing in the plan that “expressly states that the employee is disentitled to damages for pension loss over the common law notice period.”

[106] While the definition of termination of employment is tethered to “continuous service”, each provision fails to indicate that an employee terminated without reasonable notice is not entitled to continuous participation in the pension plan. In my view, the Pension Plan contains no clear language to disentitle the plaintiff or his spouse to pension accrual over the common law notice period.

[107] There being no provision in the Pension Plan which unambiguously removes the plaintiff’s common law right to pension accrual over the common law notice period, there is no genuine issue requiring a trial regarding the plaintiff’s entitlement to damages for loss of pension benefits and spousal survivor benefits during the notice period.

[108] In the circumstances, the court need not consider the plaintiff’s alternative argument that the Pension Plan violates s. 231(a) of the Canada Labour Code by ceasing pension accrual on the date of termination, thereby, excluding pension accrual over the statutory notice period.

[109] The plaintiff is seeking a gross up of the pension damages award. The plaintiff’s evidence that he intended to retire at age 55 is uncontradicted. As he has succeeded in his claim, damages for the lost accrued pension benefits will be paid as a lump sum. The court may take into account the tax consequences to the plaintiff in an award for wrongful dismissal damages: Ryan v. Laidlaw Transportation Ltd. (1995), 26 O.R. (3d) 97 (C.A.); Dowling v. Ontario (Workplace Safety and Insurance Board) (2004), 246 D.L.R. (4th) 65 (Ont. C.A.) [Dowling].

[110] In a wrongful dismissal action, the court may gross up an award of damages for loss pension benefits to take into account the tax liability to the plaintiff caused by the change in the timing of receipt of the pension. In Dowling, at para. 77, the Court of Appeal indicated that the trial judge correctly included a gross-up of the pension award stating, “to fail to take into account the adverse tax consequences occasioned by a change in the timing of their receipt would be to restrict a person from realizing the full benefit of the damages awarded in a wrongful dismissal case.”

[111] Air Canada relies upon Peet, which is distinguishable. The plaintiff exercised his right, which was available to him in that case upon termination, to apply for early retirement benefits under the employer’s pension plan. The plaintiff in Peet in fact received pension payments during the notice period, which the trial judge failed to credit the employer for. There was also no evidence by the employer’s expert that the election by the plaintiff in fact resulted in an increased present value of his pension versus the value at the end of the notice period. The court focused on the actual language of the employment contract and the Income Tax Act, which prohibited simultaneous accumulation of pensionable service and payment of pension income. In the present case, Air Canada has put forward no evidence to show that the facts in Peet are the same as the present case. There is no evidence of any pension payments made to the plaintiff during the notice period nor any countervailing expert evidence to that of the plaintiff to show the plaintiff would realize the full benefit of a lump sum damages award for lost pension accrual.

[112] On the record, there is no genuine issue requiring a trial with respect the plaintiff’s entitlement to pension benefits and spousal survivor benefits during the notice period. There is no genuine issue requiring a trial with respect to the amounts given Air Canada’s concession.

[113] The plaintiff is also entitled to a gross up of his lost pension accrual over the notice period because of the change in timing of receipt of the benefits and the resultant adverse tax consequences.

viii. Is the plaintiff entitled to damages for loss of group benefits during the notice period?

[114] A dismissed employee is entitled to the pecuniary value of lost benefits flowing from the dismissal, even though they are not replaced by the employee: Davidson.

[115] Damages for wrongful dismissal will typically include “all of the compensation and benefits that the employee would have earned during the notice period”: Davidson, at p. 589; Paquette, at para. 16.

[116] Air Canada argues that the plaintiff should be limited to his out of health expenses of $789 incurred over twelve months. In the alternative, Air Canada relies on the British Columbia decision of Matusiak v. IBM Canada Ltd., 2012 BCSC 1784, at paras. 117-20, for the proposition that the plaintiff ought to be compensated for the cost of replacement benefits, less the value of his contributions to the same.

[117] On the other hand, the plaintiff argues that the damages for lost value for the group health benefits should be fixed at 10% of his base salary, or $23,412.00, during the reasonable notice period and relies upon the following cases: Yee v. Hudson’s Bay Company, 2021 ONSC 387, at para. 31; Andros, at para. 65; Bergeron v. Movati Athletic (Group) Inc., 2018 ONSC 885, at paras. 49-51; Beatty v. Best Theratronics Ltd., 2014 ONSC 3376, at para. 20, aff’d 2015 ONCA 247; Nasager v. Northern Reflections Ltd., 2010 ONSC 5840, at paras. 8 and 23. I note in each of the cases, the court either accepted the plaintiff’s calculation without any analysis, the adverse party did not dispute the calculation, or there was an agreement between the parties, which the court accepted, without any analysis of calculating the damage.

[118] I would reject Air Canada’s first argument that the plaintiff is only entitled to compensation for his out-of-pocket expenses. As for Air Canada’s second argument, there is some merit to the notion that the plaintiff should recover damages for the loss of group benefit during the notice period based on the replacement costs in British Columbia. However, the quotes provided by Linda De Quintal, Senior Global Benefits Manager at Air Canada, of $14,052.00 over 24 months and $15,830.40 over 24 months, are based on the plaintiff living in BC. The quotes do not consider that the plaintiff moved to BC in December 2020 and the costs of coverage for the six months in Ontario; fictious dates were used to generate a quote; and, neither plan is as generous as the group plan with Air Canada. There is also no evidence that the plaintiff would have been accepted for coverage or the actual premium that he would have been obliged to pay to receive coverage based on information he himself would have provided to the insurer.

[119] I am satisfied, however, that there is precedent in Ontario for awarding damages for lost group benefits during the notice period at 10% of the employee’s salary.

[120] I therefore award the plaintiff damages in the amount of $23,412.00 for lost group benefits during the notice period.

ix. Is the plaintiff entitled to damages for lifetime retirement health benefits?

[121] It is not disputed that had the plaintiff worked an additional 5.83 months, he would have completed 25 years of service and, as a result, he and his dependents would have been entitled to post-retirement health benefits. It is conceded by Air Canada that this is granted to all employees with 25 years of services. Air Canada does not dispute that the plaintiff was 5.83 months away from being eligible for lifetime retirement benefits.

[122] Air Canada submits that under the Retiree Benefit Plan, employees are eligible for retiree health benefits if they retire from a Canadian work location and meet one of the following criteria: (a) 25 years of continuous service; (b) age and continuous service equal to 80 points (Factor 80); or (c) age 65, but at the time of his termination, they argue the plaintiff did not meet any of the criteria.

[123] The jurisprudence establishes that a dismissed employee is entitled to compensation for all benefits that he or she would have earned or received during the notice period: Davidson, at p. 589; Paquette.

[124] There is no factual dispute about when the plaintiff would have retired for the post-retirement health benefits. Had the plaintiff completed 25 years of service, he would have automatically qualified for the retiree health benefits under Air Canada’s Retiree Benefit Plan. In addition, his children who met the criteria in the plan would be eligible for coverage. On the record, the plaintiff would have qualified for the post retirement health benefits within the common law notice period.

[125] The plaintiff’s expert actuary, Mr. Jeffrey calculated the present lump sum value of the plaintiff’s lost retiree health insurance benefits at $73,361.00. Air Canada disputes the calculation on three bases. First, Air Canada argues that the planned coverage in British Columbia, where the plaintiff now lives, would cost approximately 9.74% less on average than the same benefits plan in Ontario, where the plaintiff used to live, and upon which Mr. Jeffrey’s calculation was based. Second, Air Canada challenges Mr. Jeffrey’s use of age 22 to calculate the lost coverage for the children. Third, Air Canada challenges the inclusion of coverage for the plaintiff’s second eldest daughter who it argues was not registered in school full time for a period of time.

[126] During oral submissions, counsel for Air Canada did submit, to his credit, that if the court were to find that the plaintiff was entitled to retiree health benefits, then any amount awarded for damages ought to be reduced by 10%. Counsel for Air Canada submits, however, that further deductions ought to be taken into account to reflect the use of the age 22 as the assumed age of when coverage will end for the children, and a further deduction to reflect that the plaintiff’s daughter was not actively enrolled in university for a period of time.

[127] The plaintiff is prepared to concede to Air Canada’s first challenge that the valuation should be reduced by 9.74% to reflect the cost of available coverage in British Columbia based on the quotes obtained by Air Canada. This is an appropriate concession.

[128] As for Air Canada’s second challenge to the numbers, in my view Mr. Jeffrey’s selection of age 22 to calculate the loss of coverage to the children is more than a reasonable compromise, potentially giving Air Canada a windfall. Coverage for children falls under two categories: up to age 21 or up to age 25 if the child is registered as a full-time student. Mr. Jeffrey chose age 22 as a compromise for his valuation, and, as such Air Canada is potentially the beneficiary of three years of not being liable for providing coverage for the children if they remain in school full time beyond age 22. In any event, Air Canada did not provide any actual numbers for the proposed reduction.

[129] As for the third challenge to the numbers raised by Mr. Jeffrey’s calculation, on the evidence, the plaintiff’s eldest daughter (22 at the time the motion was argued) was not in school for one year due to COVID. She was enrolled for full time school in the fall but as a result of Mr. Jeffrey’s cut off age of 22, and despite return to school not being speculative, she would have no coverage whereas under the common law notice period she would have had such coverage. In my view, Mr. Jeffrey’s use of age 22 is reasonable and, in any event, Air Canada has not put forward any valuation of the amount to be deducted for the brief period that the plaintiff’s eldest daughter was not registered in school full time.

[130] Therefore, the plaintiff’s entitlement to compensation for benefits that he would have earned during the notice period is not a genuine issue requiring a trial. There is no genuine issue for trial with respect to the valuation of the lost retirement benefit. The only valuation of those benefits is provided by the plaintiff although Air Canada did offer five quotes. Based on those quotes, the plaintiff is prepared to concede the valuation should be reduced by 9.74%. There is no actual countervailing actuarial calculation from Air Canada as to the present value of any of the quotes obtained for British Columbia. The court can assume that Air Canada has put forward all the evidence that it would advance at trial.

[131] There being no genuine issue for trial with respect to entitlement or quantum, the plaintiff is therefore entitled to damages for the retiree health benefits in the amount of $73,361.00, which sum shall be reduced by 9.74%.

x. Is the plaintiff entitled to damages for lost flight privileges or, alternatively, reinstatement in the plan (specific performance)?

[132] Air Canada does not dispute that the plaintiff was 5.83 months away from being automatically eligible for flight privileges afforded to retirees with 25 years of service.

[133] Based on Mr. Jeffrey’s calculation of the present value of the plaintiff’s lost travel privileges, the plaintiff is seeking damages in the amount of $1,814,775.00, or specific performance.

[134] Air Canada submits that travel privileges are just that – “privileges” – and are not a form of contractual employment benefit and are not compensable as part of a reasonable notice period. Air Canada argues that a determination by the court as to whether Mr. Ruel can be compensated for travel privileges cannot be carried out in the absence of viva voce evidence. Air Canada also submits that the plaintiff omitted to include a claim for damages for loss of flight passes in his statement of claim and excluded a claim for flight passes over the notice period in his Notice of Motion. Counsel for Air Canada submits that the claim was first raised in the plaintiff’s factum.

[135] For the reasons which follow, the plaintiff is entitled to specific performance and not an award for damages for the loss of travel privileges.

[136] In O'Reilly, at para. 23, Strathy C.J.O noted: “It has long been established that a wrongfully terminated employee is entitled to compensation for the loss of contractual benefits that they would have earned during the reasonable notice period, including the loss of pension benefits, bonuses, stock options, or other incentives” (emphasis added, references omitted). The flight passes or travel privileges would fall with the rubric of “other incentives”.

[137] While counsel for Air Canada made oral submissions that a value cannot be placed on these privileges, in fact Air Canada’s own witness admitted that these perk passes have value or else they would not be included as part of the separation packages. On cross examination, Leslie Vezina, Air Canada’s witness, admitted as follows: “If someone meets the 25 eligibility criteria, we provide these privileges.” Had the plaintiff not been terminated before his 25th service anniversary he would have automatically been entitled to the travel privileges within the notice period.

[138] The prayer for relief of the statement of claim indicates that the plaintiff was seeking damages for wrongful dismissal, including “special damages, the particulars of which will be provided prior to trial”.

[139] Paragraphs 13 and 14 of the statement of claim plead:

13. Mr. Ruel seeks damages equivalent to the salary, salary increases, AIP bonuses, RSU awards, pension contributions and value increase, benefits, flight privileges, employee discounts and vacation he would have received for twenty-four (24) months, less amounts already paid to Mr. Ruel on account of notice and severance pay, commencing June 4, 2020, but for his wrongful dismissal.
14. Mr. Ruel pleads that had the Defendant provided Mr. Ruel with lawful working notice in line with the sought-after notice period, he would have eligible for an unreduced pension, post-retirement benefits and retiree flight privileges for which he seeks damages, but for his wrongful dismissal. [Emphasis added.]

[140] At the cross examination of Ms. Vezina, the issue of the flight privileges beyond 24 months was raised. Counsel for the plaintiff drew the above paragraphs to the attention of counsel for Air Canada. No liberal reading of the pleading is required. On a plain reading of the pleadings, paragraph 13 deals with compensation during the notice period and paragraph 14 deals with retirement benefits and privileges. Further, Air Canada had notice of the claim by virtue of the cross examination of Air Canada’s witness on the issue. Moreover, on the evidence, including Ms. Vezina’s admission, there is no question that the plaintiff would have been entitled to retiree travel privileges upon completing 25 years of service – this would have been an automatic entitlement, but for his dismissal. Air Canada’s witness admitted that there is nothing in the travel privileges policy that provides that employees are not entitled to damages for the loss of this privilege over the common law notice period.

[141] Counsel for Air Canada argues that the retiree travel privileges document is silent on what types of passes and how many passes the plaintiff would be entitled to receive and requires viva voce evidence and raises a genuine issue for trial. Air Canada must also put its best foot forward on this motion and it is not clear how the record would improve at trial. Given Ms. Vezina’s admission on cross examination, there is no genuine issue requiring a trial with respect to entitlement during the notice period. Had the plaintiff reached 25 years of service, which would have occurred during the notice period, he would have qualified for the retiree travel privileges and, to his credit, counsel for Air Canada has conceded that point. Aside from the uncertainty as to the availability of the travel privileges into the future, no document has been put forward to indicate unambiguously or otherwise that any travel privileges either during the notice period or the retiree travel privileges would have been taken away from the plaintiff upon termination from his employment.

[142] The plaintiff’s expert has valued this loss at a little over $1.8 million dollars. In my view, since the travel privileges are subject to modification, amendment and termination by Air Canada, specific performance in the circumstances is warranted as opposed to damages. The plaintiff, like all qualified beneficiaries under the travel privileges plan, are subject to the terms and conditions including the possibility that it may be modified or cancelled. Air Canada has conceded in its factum that the remedy of specific performance would be appropriate if the court were to find that the plaintiff would have qualified for the retiree flight privileges.

[143] There is therefore no genuine issue for trial that the plaintiff would have qualified for the retiree travel privileges over the notice period and no genuine issue for trial about the remedy as the plaintiff sought, as an alternative, reinstatement into the program.

Disposition

[144] The plaintiff is granted summary judgment as set out below:

i. The plaintiff is entitled to twenty-four months’ notice, or damages in the amount of $234,120.00, less any statutory amounts paid. A trust and accounting, as described above, is imposed on damages for any unexpired term. ii. The plaintiff is awarded damages for the lost value for the group health benefits during the notice period fixed at 10% of his base salary, or $23,412.00. iii. The plaintiff is entitled to damages for the lifetime lost retiree benefits in the amount of $73,361.00, which amount is to be reduced by 9.74%. iv. The plaintiff is entitled to damages for lost LTIP accrual during the notice period and is awarded the amount set out in paragraph 63 of the plaintiff’s factum (as calculated by Air Canada). v. The plaintiff is entitled to damages in the amount of $160,148.00 (grossed up) for lost pension accrual benefits over the notice period and lost spousal survivor benefits in the amount of $27,629.00 (grossed up) over the same period. vi. The plaintiff is entitled to specific performance with respect to Air Canada’s retiree flight privileges. vii. The determination of the plaintiff’s entitlements to an AIP bonus in 2021 and a COVID-19 bonus or stock options are to be dealt with at a summary trial pursuant to Rule 20.05(2). viii. Given the timing of the release of these Reasons, the issue of the AIP may well be moot by that time if no AIP bonus was paid in 2021. However, to be clear, to the extent that any AIP bonus is paid during the notice period, the plaintiff is entitled to an AIP bonus. This issue may be dealt with by way of viva voce evidence/a summary trial pursuant to Rule 20.05(2). ix. The quantum of any COVID-19 bonuses or stock options that the plaintiff would have been entitled to participate in during the notice period shall be dealt with by way of a summary trial pursuant to Rule 20.05(2). x. The plaintiff is entitled to prejudgment interest on damages, but if the parties are not able to agree on prejudgment interest, a conference call may be scheduled through Ms. Diamante.

Costs

[145] Counsel for the parties may contact Ms. Diamante within fifteen days of the date of these Reasons providing her with two agreed upon dates and time to schedule a case conference to speak to the issue of costs and to schedule a date to address the AIP and COVID-19 bonus.

A. P. Ramsay J.

Released: April 4, 2022