COURT FILE NO.: CV-21-00084709-0000
DATE: 2022/11/25
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
Masayo Williams
Plaintiff (Moving Party)
– and –
Air Canada
Defendant (Responding Party)
Malini Vijaykumar, for the Plaintiff
Jackie VanDerMeulen and Anthony Panacci, for the Defendant
HEARD: April 21, 2022
REASONS FOR JUDGMENT
RYAN BELL J.
Overview
[1] In 2020, as a result of the COVID-19 pandemic, Air Canada reduced its workforce by more than 50 per cent. Masayo Williams, a long-time employee, was one of the employees whose employment was terminated.
[2] Ms. Williams did not accept the separation package offered by Air Canada. Air Canada paid Ms. Williams the minimum statutory entitlements under the Canada Labour Code[^1]: payment in lieu of notice, severance pay, and all accrued but unused vacation pay.
[3] There is no dispute that Ms. Williams was terminated without cause in May 2020 and is entitled to damages in lieu of reasonable notice of termination. The issues to be determined on this motion for summary judgment are:
(i) What is the appropriate reasonable notice period?
(ii) Is Ms. Williams entitled to damages for lost group benefits during the reasonable notice period?
(iii) Is Ms. Williams entitled to damages representing pension contributions during the reasonable notice period?
(iv) Is Ms. Williams entitled to damages for annual incentive plan and profit sharing plan bonuses paid during the reasonable notice period?
(v) Is Ms. Williams entitled to specific performance in respect of Air Canada’s travel privileges program and to receive a 25th anniversary service award?
(vi) Did Ms. Williams fail to reasonably mitigate her damages?
(vii) Should the trust and accounting approach be applied to this judgment?
[4] For the following reasons, I conclude that the appropriate reasonable notice period is 24 months. Air Canada has not established that Ms. Williams failed to reasonably mitigate her damages. I find that Ms. Williams is entitled to damages, net of amounts paid by Air Canada and amounts earned in mitigation, in the amount of $132,772.33. Ms. Williams is also entitled to damages in respective of any incentive and profit sharing plan payments made in respect of fiscal 2021, and damages representing pension contributions during the 24-month reasonable notice period.
Factual Summary
[5] Although Ms. Williams joined Air Canada on June 3, 2000, she was previously employed by Canadian Airlines International. Based on information provided by Canadian Airlines, Air Canada considered Ms. Williams’ start date with Air Canada to be October 17, 1996. Ms. Williams’ evidence is that she began working for Canadian Airlines on May 27, 1996. There is no dispute that had she continued to be employed by Air Canada, Ms. Williams would have reached her 25th anniversary with the company in 2021.
[6] When Ms. Williams was terminated on May 25, 2020, she held the position of International Operations Training Manager, based out of Air Canada’s headquarters in Montreal. In that position, Ms. Williams designed and delivered training programs for customer service staff, completed performance assessments of new customer service agents, performed quality audits of various Air Canada stations, evaluated corporate procedures to identify potential compliance issues with Canadian safety requirements, and mentored and trained new international operations training managers.
[7] As of May 2020, Ms. Williams received an annual base salary of $70,380 (monthly base salary of $5,865). Ms. Williams was also eligible to participate in Air Canada’s group insurance benefit plan, pension plan, annual incentive plan (“AIP”), and profit sharing plan (“PSP”), subject to the terms of those plans.
[8] As an employee, Ms. Williams was also able to take advantage of travel privileges that Air Canada provided to its employees. Ms. Williams maintains that these travel privileges were part of her compensation package with Air Canada; Air Canada disagrees.
[9] On May 25, 2020, Ms. Williams was terminated, effective immediately, without cause. She was 52 years old. When Ms. Williams did not accept the severance package offered, Air Canada paid Ms. Williams her minimum statutory entitlements under the Canada Labour Code, which totalled $11,289.17.
[10] From June 2020 to July 2021, Ms. Williams was unable to secure new employment. During this time, Ms. Williams applied for 17 positions, obtained two interviews, and received no job offers. With the assistance of Ontario’s Second Career program, Ms. Williams enrolled in an interactive media management program at Algonquin College in September 2021.
[11] In the spring of 2022, Ms. Williams obtained new employment as a part-time teacher at a Japanese school and as a coordinator for commercial training with Canadian North/Bradley Air Services Limited.
Summary judgment is appropriate
[12] The parties agree that this is an appropriate case for determination on a motion for summary judgment. I agree. This is a straight-forward claim for wrongful dismissal without cause and in my view, amenable to a r. 20 summary judgment motion: Arnone v. Best Theratronics Ltd., at para. 12.[^2]
[13] The parties have exchanged affidavits and conducted cross-examinations. All necessary factors to determine the appropriate reasonable notice period, the employee’s entitlements, and the duty to mitigate are addressed in the record. I am satisfied that I can fairly and justly adjudicate the dispute and that a summary judgment is a timely, affordable, and proportionate procedure.
Reasonable notice period
[14] On the termination of employment without cause, an employee is entitled to damages equivalent to what the employee would have earned during the notice period, including compensation for bonuses or incentives that would have been earned had the employer not breached the employment contract: Matthews v. Ocean Nutrition Canada Ltd., at para. 49.[^3]
[15] What constitutes reasonable notice is to be decided with reference to a particular case, having regard to the character of the employment, the length of service, the age of the employee, and the availability of similar employment, considering the experience, training, and qualifications of the employee: Bardal v. Globe & Mail Ltd., at para. 21.[^4] No single factor is to be given disproportionate weight: Honda Canada Inc. v. Keays, at para. 32;[^5] Love v. Acuity Investment Management Inc., at paras. 19-22.[^6]
[16] Ms. Williams was 52 years old at the time of her dismissal. Her start date with Air Canada was either in May 1996 (her evidence) or October 1996 (Air Canada’s position). In my view, the five-month discrepancy does not impact on the reasonable notice period. At the time of her dismissal, Ms. Williams had worked for Air Canada for more than 23.5 years, and was, without question, a long-term employee. 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. In McKinney v. University of Guelph, the Supreme Court of Canada observed that “[b]arring special skills, it is generally known that persons over 45 have more difficulty finding work than others.[^7] The fact that an employee has worked for one employer for so long may impact their employability because, “having served one employer for such a lengthy period of time, a potential new employer may view that individual as rather set in [their] ways and not as adaptable to change”: Drysdale v. Panasonic Canada Inc., at para. 14;[^8] Stephanie Ozorio v. Canadian Hearing Society, at para. 16.[^9]
[17] Ms. Williams began working for Canadian Airlines as a casual administrative clerk. She worked her way up the ranks and, in 2016, was promoted to International Operations Training Manager at Air Canada. Although Ms. Williams had no employees reporting directly to her, her position had managerial characteristics. As International Operations Training Manager, she was responsible not only for the design but also the delivery of training programs, completing performance assessments, and mentoring and training new international operations training managers. Ms. Williams’ evidence is that, on average, she delivered 20 to 30 training courses per year. Each course included 1 to 15 people and lasted from 3 to 14 days.
[18] In its submissions regarding mitigation, Air Canada acknowledges the education-related skills developed by Ms. Williams: she developed the ability to deliver training to people of diverse cultures, with differing skill levels, in a wide range of positions, and on diverse subject matters.
[19] Since 1996, Ms. Williams’ only work experience was with Canadian Airlines and Air Canada. Her post-secondary diploma in Fashion, Business and Merchandising from a design institute in Japan – the only post-secondary qualifications Ms. Williams held at the time she was terminated – is not recognized in Canada.
[20] Ms. Williams applied for 17 jobs from June 2020 to July 2021, secured only two interviews (one from Canadian North) and received no job offers.
[21] Then, in September 2021, with the benefit of tuition funding from Ontario’s Second Career program, she enrolled in an interactive media management program at Algonquin College. In April 2022, Ms. Williams secured new employment as a part-time teacher. In May 2022, she was hired as Coordinator for Commercial Training with Canadian North.
[22] In Minott v. O’Shanter Development Co.,[^10] Laskin J.A. stated at para. 62:
Determining the period of reasonable notice is an art not a science. In each case trial judges must weigh and balance a catalogue of relevant factors. No two cases are identical; and, ordinarily, there is no one “right” figure for reasonable notice. Instead, most cases yield a range of reasonableness.
[23] Counsel have referred me to a number of cases dealing with employment situations that they say involve individuals of somewhat similar age, length of employment, skill, and other factors.[^11] Based on their respective cases, Air Canada puts the reasonable notice period at 12 months. Ms. Williams says that the reasonable notice period is 24 months.
[24] In support of its position, Air Canada emphasizes that although Ms. Williams’ role had some managerial characteristics, it was within the lower half of the hierarchy established by Air Canada’s “Career Band Profiles Policy.” Air Canada also highlights that Ms. Williams did not manage employees and had no employee reports. It seems to me that Air Canada unduly emphasizes the character of Ms. Williams’ employment, and thereby diminishes the importance of her age and length of tenure, to minimize the reasonable notice to which she is entitled. This approach has been expressly rejected by the Court of Appeal for Ontario in Di Tomaso v. Crown Metal Packaging Canada LP,[^12] where the court noted that, “if anything, [the character of the employment] is today a factor of declining relative importance.”
[25] In concluding that the character of the employment is a factor of declining relative importance, the Court of Appeal referred to the New Brunswick Court of Appeal’s decision in Medis Health and Pharmaceutical Services Inc. v. Bramble.[^13] In Medis, the New Brunswick Court of Appeal commented that cases such as Moncton Chrysler Dodge – relied on by Air Canada in this case – “reflect the traditional approach’s negative view of the status of junior employees....they belong to a by-gone era where the notion that 12 months’ notice was the upper limit had great currency.”[^14] All of the cases upon which Air Canada relies predate the Court of Appeal’s decision in Di Tomaso.
[26] The case law provided by Ms. Williams is more relevant. 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.
[27] 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.[^15] 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.
[28] Having regard to all the relevant factors and taking into account the relevant jurisprudence, I find that the appropriate notice period is 24 months.
Group Benefits
[29] Ms. Williams submits that she is entitled to damages for the value of employer-provided group benefits during the reasonable notice period. She contends that because Air Canada has not provided any evidence to quantify her lost benefits or any evidence as to the cost of replacement for a fully comparable benefits plan, she is entitled to damages for the loss, based on 10 per cent of her base salary: Groves v. UTS Consultants Inc.;[^16] Saikaly v. Akman Construction Ltd..[^17]
[30] Air Canada submits that it is inappropriate to value benefits on this basis. Air Canada’s position is that in the absence of any evidence of actual losses, Ms. Williams is not entitled to damages in respect of group benefits. In the alternative, Air Canada says that Ms. Williams should only be compensated for the cost of replacement benefits. Ms. Williams did not seek to obtain replacement benefit coverage. The only evidence in the record as to the cost of replacement benefits is from Linda De Quintal, Air Canada’s Senior Manager, Global Benefits. Ms. De Quintal is familiar with other benefit plans available in the market and provided evidence that the most comparable plan available in the market would cost $259.80 with a co-applicant if Ms. Williams were to seek coverage in Quebec, and $327.70 with a co-applicant if Ms. Williams were to seek coverage in Ontario.
[31] Fixing benefits as a percentage of salary can be reasonable in appropriate circumstances. I note that in Groves, the employer did not provide any evidence with respect to the cost or value of benefits and did not oppose the method of calculating the benefits entitlement proposed by the plaintiff at 10 per cent of his base salary. In Saikaly, the court described the evidence provided with respect to the value of the employee benefits as “less than ideal” and awarded damages for employee benefits at 10 per cent of the employee’s salary.[^18]
[32] In Ruel v. Air Canada,[^19] the plaintiff’s argument that damages for lost value for the group health benefits should be fixed at 10 per cent of his base salary was challenged by Air Canada. In that case, Ramsay J. acknowledged that there was merit to the notion that the plaintiff should recover damages for the loss of group benefits during the notice period based on the replacement costs in British Columbia. However, Ramsay J. observed that the quotes provided by Air Canada did not take into account that the plaintiff had moved to British Columbia. In addition, fictitious dates were used to generate the quotes, neither plan was as generous as the group plan with Air Canada, and there was no evidence that the plaintiff would have been accepted for coverage.[^20] Justice Ramsay awarded damages for lost group benefits during the notice period at 10 per cent of the employee’s salary.[^21]
[33] Ms. Williams’ evidence is that she commuted to her position in Montreal from her home in Ottawa. The quotes provided by Ms. De Quintal include replacement costs in Ontario. Ms. De Quintal’s evidence that the “FollowMe Enhanced Plus” was the most comparable plan available on the market was unchallenged. So too was Ms. De Quintal’s evidence that she was required to use a “fictitious” termination date in order to obtain the quotes. While there was no evidence that Ms. Williams would have been accepted for coverage, there is no evidence to the contrary because Ms. Williams failed to apply for replacement benefits.
[34] Having regard to these circumstances and the evidence before me, I conclude that the appropriate measure of Ms. Williams’ damages for lost group benefits during the 24-month notice period is $7,864.80 (24 x $327.70).
Pension Plan
[35] Ms. Williams submits that she is entitled to damages representing pension contributions and recognition of service during the reasonable notice period.
[36] In Matthews, the Supreme Court of Canada affirmed a two-step approach to determine whether an employee dismissed without cause is entitled to damages in respect of a bonus or incentive benefit:
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?[^22]
[37] As the Supreme Court explained in Matthews, at paras. 52-54, this two-step approach rests on two key principles:
(i) when employees sue for damages for wrongful 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
(ii) a contract of employment 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.[^23]
[38] There is no issue that Ms. Williams’ compensation package included her participation in Air Canada’s pension plan. Air Canada argues that the terms of its 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. The pension plan calculates an employee’s monthly pension benefit based on “Allowable Service”, which Air Canada submits is credited for any month during which the employee is employed by Air Canada for which “Compensation” is paid.
[39] The pension plan defines “Compensation” to exclude “any amount payable subsequent to or on account of the termination of service.” “Termination of Employment” is defined to mean the “cessation of Continuous Service which is not the result of retirement as determined in Section 5 nor the result of death.”
[40] “Continuous Service” is defined 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.
[41] But for the termination of Ms. Williams’ employment, she would have been entitled to pension contributions as a component of her compensation during the notice period. The question then is whether there are clear and unambiguous contractual terms limiting Ms. Williams’ right to pension accrual over the notice period: Taggart, at para. 14.
[42] The definition of “Compensation” uses the term “termination of service.” It is unclear whether “termination of service” is intended to have the same meaning as “Termination of Employment”, a defined term in the pension plan. Certainly, termination of service could mean the end of the period of working notice, and “Termination of Employment” must be taken to refer to an employee’s lawful termination absent clear language to the contrary: Lin, at para. 91.
[43] While “Termination of Employment” is tied to “Continuous Service,” neither provision clearly and unambiguously states that an employee is not entitled to pension accrual during the common law notice period. There is no exclusion clause that clearly covers the exact circumstances which have arisen: Matthews, at para. 66.
[44] Accordingly, I find that Ms. Williams is entitled to damages representing pension contributions and recognition of service during the 24-month reasonable notice period. I am advised that the parties have agreed to confer and attempt to resolve Ms. Williams’ outstanding entitlement to damages in this regard.
AIP and PSP Payments
[45] In fiscal 2019, Ms. Williams received an AIP payment in the amount of $10,299, and a PSP payment of $2,002.84. The evidence is uncontradicted that, in 2020, Air Canada faced its worst financial year in its history, operating at a loss of $3.8 billion. As a result of Air Canada’s 2020 operating loss, no awards were issued under the AIP or the PSP for the 2020 fiscal year. On cross-examination, Air Canada’s deponent stated that it was “possible” that AIP and PSP payments could be paid to employees for the 2021 and 2022 fiscal years.
[46] Ms. Williams accepts that she would not have earned an AIP or PSP payment for 2020. However, 12 months of her notice period would have run in Air Canada’s fiscal year 2021 and five months would have run in fiscal year 2022. Ms. Williams submits that in the absence of financial evidence as to the quantum of these “possible payments”, she is entitled to damages for the 17-month period, calculated at half of her payments for fiscal year 2019, that is, $6,150.92.
[47] Air Canada submits that based on the undisputed financial records, the threshold requirements for payments to be triggered under the AIP and PSP would not have been met: Air Canada experienced losses in each reported quarter in 2021 and did not generate any profits or adjusted pre-tax income. Air Canada also submits that, in any event, the incentive plans unambiguously state that Ms. Williams has no entitlements under either plan following the termination date, regardless of whether she had an entitlement to notice of termination.
[48] The AIP provides:
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.
o 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.
[49] The language of the PSP is similar:
If you terminate your employment (including resigning and/or abandoning your position) or if your employment is terminated before the payout date (during or after the plan year), you will not be eligible for a profit sharing award.
The Termination Date is the later of the date:
(i) you notify Air Canada or Air Canada notifies you of the immediate termination of your employment, or;
(ii) the last day of which you are required to perform your employment duties,
Regardless in both cases, of whether you are entitled to notice of termination of employment under contract, the law, or an order of a court or tribunal.
[50] The identical AIP plan was very recently considered by Ramsay J. in Ruel. In Ruel, Ramsay J. concluded that the AIP is ambiguous because 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 … receive the AIP. [emphasis in original][^24]
[51] As Ramsay J. observed in Ruel, “any ambiguity should be construed in favour of the plaintiff who had no hand in drafting the plan.”[^25]
[52] At para. 67 of Ruel, Ramsay J. highlighted a more fundamental concern with the position taken by Air Canada in that case:
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”.…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. [emphasis in original]
[53] While Air Canada submits that the language of the AIP and PSP is “markedly different” from plans that merely require an employee to be “full-time” or “active” at the time of payment as discussed by the Supreme Court of Canada in Matthews, the language of both plans is, nonetheless, ambiguous.
[54] I agree with and adopt the reasoning of Ramsay J. in Ruel in concluding that the AIP does not unambiguously take away Ms. Williams’ common law right to any AIP payment she would have received during the common law notice period. I would apply the same analysis to the PSP and reach the same conclusion.
[55] On the record before me, the AIP and PSP bonus is normally paid in March of the year following the eligibility year. In my view, Ms. Williams is entitled to be compensated for the loss of these payments for fiscal 2021, if payments under the AIP and PSP were in fact made in respect of that fiscal year. Any such payments would, presumably, have been paid in March 2022.
[56] I have reached a different conclusion with respect to any AIP and PSP payments for fiscal 2022. These payments, if any, will be made in March 2023. Ms. Williams would not have become entitled to any such payments during the 24-month reasonable notice period. Taking May 25, 2022 as the “Termination Date” – the end of the 24-month reasonable notice period – both plans are clear that all entitlements unpaid as at that date “shall be cancelled.”
Travel Privileges and 25th Anniversary Service Award
[57] Ms. Williams relies on the two-part test outlined in Matthews in support of her position that she is entitled to be enrolled in Air Canada’s travel privileges program and to receive the 25th anniversary service award. She says that she would have become automatically eligible for the travel privileges program afforded to retirees with 25 years of service and she would have received the 25th anniversary service award within the 24-month reasonable notice period.
[58] Air Canada submits that Ms. Williams is not entitled to specific performance in respect of either the travel privileges program or the service award because they are “privileges” and not forms of contractual employment benefits that would be compensable as part of the reasonable notice period. Air Canada also disputes Ms. Williams’ entitlement on the basis that she was not a “retiree.”
[59] In O’Reilly v. IMAX Corporation, at para. 23, Strathy C.J.O. observed, “[i]t 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.”[^26] In Ruel, Ramsay J. concluded that the flight passes or travel privileges would fall within the rubric of “other incentives.”[^27]
[60] The evidentiary record before me does not establish that the flight privileges program or the service award were contractual benefits. I conclude that both are in the nature of employment privileges,[^28] and not compensable employment benefits, for the following reasons.
[61] Neither the travel privileges program nor the service award is referred to in the terms and conditions letter confirming Ms. Williams’ appointment to the position of International Operations Training Manager. In contrast to the applicable benefits program, which is described in the appointment letter, the travel privileges are described in Air Canada’s employee and personal travel policies, and retiree travel privileges are set out in the company’s retired employee policy.
[62] The evidence establishes that travel passes are provided by Air Canada on a gratuitous basis – they are, in essence, “standby travel” and do not guarantee a right to fly. Travel passes are subject to onerous restrictions and conditions, and pass holders are subject to deplanement. Air Canada retains the discretion to revoke travel privileges. Air Canada is not required to offer the travel privileges indefinitely and retains the discretion to change or terminate the program at any time. There is no commitment from the employer to the employee in the case of travel privileges.
[63] I contrast the travel privileges as set out in Air Canada’s policy documents with AIP and PSP payments provided under the terms and conditions of these plans. The AIP payment, “[i]n addition to your base pay…provides another layer of potential earnings.” The PSP payment is described as “a meaningful way to reward employees for their hard work and an incentive to continue working towards our collective goals.” By contrast, employee travel is described as a privilege and the “policy is subject to change without notice.” Travel privileges are not transferable and cannot be sold to another person.
[64] With regard to the service award, Air Canada has recognized employee service anniversaries by providing employees with service awards. However, the nature of the awards is at Air Canada’s discretion and subject to change without notice.
[65] In support of her position, Ms. Williams relies on cases where courts have awarded employees compensation for the loss of various types of benefits during the notice period, including a long service award (Nelson v. Champion Feed Services Inc.[^29]), clothing coupons and discounts (Bruce-Vaughan v. Dalmys (Canada) Ltd.[^30]), a location allowance (Bhavsar v. Canadian Natural Resources Ltd.[^31]), and a car allowance (Celestini v. Shoplogix Inc.[^32]).
[66] All of these cases are distinguishable on the facts. In Nelson, the employer appears to have not disputed the employee’s contractual entitlement to the long-service award. Similarly, in Celestini, the employee’s entitlement to the car allowance was not disputed. In Bruce-Vaughan, the employee’s benefits were said to include a clothing discount. Finally, in Bhavsar, the employees’ compensation packages included location allowances.
[67] I find that the flight privileges and anniversary service awards offered by Air Canada did not form part of Ms. Williams’ compensation package and are not contractual entitlements. I therefore dismiss Ms. Williams’ claim that she be enrolled in Air Canada’s travel privileges program and that she receive the 25th anniversary service award.
[68] I also dismiss Ms. Williams’ claim for $795 in damages as reimbursement for out-of-pocket expenses incurred by Ms. Williams for air travel during the notice period. The travel privileges were, just that, privileges. There was no guarantee that Ms. Williams would have been able to fly using travel privileges and no commitment was made by Air Canada to Ms. Williams in this regard.
Did Ms. Williams fail to reasonably mitigate her damages?
[69] Air Canada submits that the period of reasonable notice should be reduced by 50 per cent because Ms. Williams has failed to reasonably mitigate her damages. Air Canada argues that given Ms. Williams’ transferable skill set, she would have found alternate employment sooner if she had taken reasonable steps to find such employment. Air Canada contends that Ms. Williams unreasonably restricted her job search to Ottawa, unreasonably delayed applying for alternate employment, unreasonably applied to a “meager” 17 jobs, failed to inquire into income replacement benefits, and acted unreasonably in deciding to pursue a new career.
[70] I disagree. On the record before me, Air Canada has not established that Ms. Williams failed to reasonably mitigate her damages.
[71] The onus is on the employer to establish a failure to mitigate: Michaels v. Red Deer College.[^33] The employer must prove that had the employee taken reasonable steps, they would have found “a comparable position reasonably adapted to [their] abilities”: Link v. Venture Steel Inc., at para. 73.[^34]
[72] An employee’s mitigation efforts need only be reasonable, not perfect: Summerfield v. Staples Canada Inc., at paras. 20-21.[^35] The employer must show that the employee’s conduct was unreasonable, not in one respect, but in all respects: Furuheim v. Bechtel Canada Ltd., at para. 3.[^36]
[73] I disagree with Air Canada’s description that Ms. Williams’ mitigation efforts were “meager.” Ms. Williams has produced detailed evidence of her job search efforts, which included attending educational programs and seminars in an effort to bolster her credentials. Her efforts included receiving job alerts, attending career counselling, and preparing her resume – something she had not had to do in 24 years. She began applying for positions within two and half months of termination. I find that in the circumstances, which also included the COVID-19 pandemic, Ms. Williams’ efforts to prepare to re-enter the job market were reasonable. I am mindful that Ms. Williams’ re-entry into the job market, as well as her job search, took place during the COVID-19 pandemic, with unprecedented restrictions and lockdowns, and associated economic uncertainty.
[74] In Corso v. Nebs Business Products Ltd., at para. 73, Strathy J., as he then was, observed that, “[a]lthough 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.”[^37] I would not characterize Ms. Williams as “slow off the mark” in her efforts. However, if there was any delay, I am not satisfied that this resulted in the loss of opportunity, given that it was not until 23 months following her termination that Ms. Williams secured a part-time position teaching, and only 24 months after her termination that she secured a full-time position, with a company that had previously interviewed her.
[75] Air Canada argues that Ms. Williams’ decision to search only for jobs in Ottawa, instead of in Montreal, was unreasonable. There is evidence that at the time she was terminated, Ms. Williams was working from her home office in Ottawa. Air Canada compiled job postings for the months of June, July, and October 2021 for positions it says were comparable to Ms. Williams’ position at Air Canada; however, it did not provide those postings to her at the time. I agree with Ms. Williams that it is not now open to Air Canada to contend that she ought to have known about these positions – and applied for them – without making the postings available to her at the time: Maxwell v. United Rentals of Canada Inc., at paras. 38-41.[^38]
[76] There is also no evidence that the job postings compiled by Air Canada – for positions in Montreal or elsewhere – were comparable to Ms. Williams’ position. Some postings were for positions located outside Ottawa or Montreal with no indication of the possibility of remote work. Air Canada’s deponent admitted on cross-examination that the individuals who ran the searches for these postings did not consider Ms. Williams’ education and qualifications before searching and retrieving the postings.
[77] The onus on Air Canada is “by no means a light one”: Yiu v. Canac Kitchens Ltd., at para. 16.[^39] In light of the admissions made by Air Canada’s deponent on cross-examination, the evidence put forward by Air Canada does not show what comparable positions were available that Ms. Williams could have applied for but did not.
[78] Ms. Williams’ evidence that her education credentials were not recognized in Canada proved to be “one main obstacle” to her re-employment stands uncontradicted. To try to overcome this barrier, she applied for the Ontario government’s Second Career Program. Based on her job search efforts up to that point, the program provided tuition funding for a one-year interactive media management post-graduate certificate program at Algonquin College. While Air Canada contends that Ms. Williams acted unreasonably in deciding on a new career, it is Ms. Williams’ uncontradicted evidence that her retraining at Algonquin College helped her secure the job offer from Canadian North.
[79] Finally, Air Canada submits that Ms. Williams’ failure to inquire into income replacement benefits – the Canada Emergency Response Benefit – was unreasonable and her explanations inadequate to relieve her of her legal duty to mitigate her damages. Air Canada relies on Yates v. Langley Motor Sport Centre Ltd., at paras. 35-47.[^40] In Yates, the court held that CERB payments should be deducted from damages awards for wrongful dismissal. With respect, I do not read Yates as standing for the proposition that an employee is required to apply for benefits such as CERB as part of their mitigation efforts.
[80] In any event, Air Canada must show that Ms. Williams’ conduct was unreasonable, not in one respect, but in all respects. This it has not done. I find that Air Canada has not discharged its onus of showing that Ms. Williams failed to mitigate her damages.
Trust and accounting
[81] Given the timing of the release of this decision, Ms. Williams’ request that a trust and accounting approach be applied to the judgment is moot.
Disposition
[82] I therefore grant summary judgment in the amount of $132,772.33. I have calculated this amount as follows:
• Base salary: $140,760 ($5,865.00 x 24 months)
• Benefits: $7,864.80 ($327.70 x 24 months)
• Less payments made under the Canada Labour Code: $11,289.17
• Less mitigation income: $4,563.30.
[83] Ms. Williams is entitled to prejudgment and postjudgment interest on this amount under s. 128 and s. 129, respectively, of the Courts of Justice Act.[^41]
[84] I declare that Ms. Williams is entitled to damages in respect of AIP and PSP payments made, if any, for fiscal 2021, together with prejudgment and postjudgment interest.
[85] I also declare that Ms. Williams is entitled to damages representing pension contributions and recognition of service during the 24-month reasonable notice period. If the parties are unable to resolve Ms. Williams’ outstanding entitlement to damages in this regard, together with prejudgment and postjudgment interest, I may be spoken to.
[86] The remainder of Ms. Williams’ claims are dismissed.
[87] In the event the parties are unable to agree on costs of the motion and the action, they may provide their submissions in writing. Ms. Williams is to provide her submissions by December 16, 2022. Air Canada is to provide its responding submissions by January 6, 2023. Submissions are not to exceed three pages, excluding any bill of costs and authorities. If no submissions are received within this timeframe, the parties will be deemed to have settled the issue of costs as between themselves.
Madam Justice Robyn M. Ryan Bell
Released: November 25, 2022
[^1]: R.S.C. 1985, c. L-2. [^2]: 2015 ONCA 63, 329 O.A.C. 284. [^3]: 2020 SCC 26, 449 D.L.R. (4th) 583. [^4]: (1960), 1960 294 (ON SC), 24 D.L.R. (2d) 140 (Ont. H.C.). [^5]: 2008 SCC 39, [2008] 2 S.C.R. 362. [^6]: 2011 ONCA 130, 277 O.A.C. 15. [^7]: 1990 60 (SCC), [1990] 3 S.C.R. 229, at p. 299. [^8]: 2015 ONSC 6878. [^9]: 2016 ONSC 5440, 2016 C.L.L.C. 2010-060. [^10]: (1999), 1999 3686 (ON CA), 168 D.L.R. (4th) 270 (ON CA). [^11]: Ms. Williams referred me to: Battiston v. Microsoft Canada Inc., 2020 ONSC 4286, 2020 C.L.L.C. 210-059, rev’d on other grounds, 2021 ONCA 727, 2022 C.L.L.C. 210-011; Valle Torres v. Vancouver Native Health Society, 2019 BCSC 523, 2019 C.L.L.C. 210-048; Chapell v. Canadian Pacific Railway Company, 2010 ABQB 441, 29 Alta. L.R. (5th) 380; Hogan v. 1187938 BC Ltd., 2021 BCSC 1021, 2021 C.L.L.C. 210-054; Brito v. Canac Kitchens, 2011 ONSC 1011, 87 C.C.E.L. (3d) 184, rev’d on other grounds, 2012 ONCA 611; Drysdale v. Panasonic Canada Inc., 2015 ONSC 6878. Air Canada referred me to: Walker v. Italian Cultural Centre Society, 2001 BCSC 819; Spontaneo et al. v. Woodward Group of Companies, 1998 18690 (NL Sup Ct); Tuchscherer v. Watson Distributors Ltd., 2000 SKQB 290, [2000] 10 W.W.R. 141; Randall v. Wayne Pitman Ford Sales Ltd., 1992 CarswellOnt 2267 (Ont. Ct. J.); Moncton Chrysler Dodge (1980) Ltd. v. Johnson, (1991) 1991 2717 (NB CA), 114 N.B.R. (2d) 192 (NB CA). [^12]: 2011 ONCA 469, 337 D.L.R. (4th) 679, at paras. 27-28. [^13]: (1999), 1999 13124 (NB CA), 175 D.L.R. (4th) 385 (NB CA). [^14]: Medis Health, at para. 73. [^15]: 2021 ONSC 4962, 2022 C.L.L.C. 210-002. [^16]: 2019 ONSC 5605, 2020 C.L.L.C. 210-008, at paras. 96-97, aff’d 2020 ONCA 630, 2021 C.L.L.C. 210-010. [^17]: 2019 ONSC 799, 52 C.C.E.L. (4th) 224, at para. 38. [^18]: Saikaly, at paras. 36, 38-39. [^19]: 2022 ONSC 1779, 2022 C.L.L.C. 210-040. [^20]: Ruel, at para. 118. [^21]: Ruel, at para. 119. [^22]: Matthews, at para. 55. See also Lin v. Ontario Teachers’ Pension Plan, 2016 ONCA 619, 402 D.L.R. (4th) 325; Paquette v. TeraGo Networks Inc., 2016 ONCA 618, 352 O.A.C. 1; Taggart v. Canada Life Assurance Co. (2006), 50 C.C.P.B. 163 (Ont. C.A.). [^23]: See also Manastersky v. Royal Bank of Canada, 2021 ONCA 458, at para. 10. [^24]: Ruel, at para. 64. Ms. Brunelle was also the deponent for Air Canada in the case at bar and gave similar evidence that the AIP and PSP bonuses are normally paid in March of the year following the eligibility year. [^25]: Ruel, at para. 66. [^26]: 2019 ONCA 991. [^27]: Ruel, at para. 136. [^28]: This term was used in Helbig v. American Airlines, Inc., [2011] C.L.A.D. No. 58, at para. 64, in discussing travel privileges afforded to the complainant as an employee of the respondent airline. [^29]: 2010 ABQB 409, 30 Alta. L.R. (5th) 162, at para. 127. [^30]: (1992) 1992 2347 (BC SC), 40 C.C.E.L. 112 (BC Sup Ct), at paras. 24-27. [^31]: 2016 ABQB 471, 35 C.C.E.L. (4th) 224, at paras. 32-33. [^32]: 2021 ONSC 3539, at para. 77. [^33]: (1975), 1975 15 (SCC), [1976] 2 S.C.R. 324. [^34]: 2010 ONCA 144, 259 O.A.C. 199. [^35]: 2016 ONSC 3656, 33 C.C.E.L. (4th) 249. [^36]: (1990), 30 C.C.E.L. 146 (Ont. C.A.). [^37]: (2009) 2009 11215 (ON SC), 72 C.C.E.L. (3d) 110 (Ont. S.C.). [^38]: 2015 ONSC 2580, 2015 C.L.L.C. 210-039. [^39]: 2009 9412 (Ont. S.C.). [^40]: 2021 BCSC 2175, 2022 C.L.L.C. 210-017. [^41]: R.S.O. 1990, c. C.43.