A Hong Kong-based airline that permanently shuttered its Vancouver operations in 2020 because of the COVID-19 pandemic has been ordered to pay nearly $170,000 severance to the woman who managed the office.
Frances Turcic Okano spent her entire career, nearly 35 years, working for Cathay Pacific Airways Ltd. in the airline's Vancouver office, according to a B.C. Supreme Court decision published online Friday.
When the pandemic began in early 2020, Cathay Pacific's passenger traffic plummeted to less than one per cent of what it had been during the previous year, prompting the company to enact a variety of cost-saving measures.
Eventually, these measures grew to include the closure of the Vancouver office. Okano and the 71 employees she supervised had their employment terminated.
According to court documents, Okano was informed of the decision on Oct. 13, 2020, and told that her employment would end on Dec. 11, 2020 – two months' notice.
She was paid the basic three-month severance required by the Canada Labour Code in early 2021, receiving a total of $31,613.72, according to the court decision.
Cathay Pacific offered her an additional severance package, but she rejected it, taking the airline to court in hopes of receiving better terms.
Okano argued that she was entitled to the restoration of wages that had been cut as part of the company's cost-saving measures, as well as 24 to 26 months' worth of salary in lieu of notice for her termination.
Cathay Pacific agreed that Okano was entitled to damages for wrongful dismissal, but disputed whether the wage cuts should be restored and argued for 18 to 20 months' worth of salary in lieu of notice.
B.C. Supreme Court Justice Gordon C. Weatherill sided largely with the airline in his decision.
NO REPAYMENT OF WAGE REDUCTIONS
On the matter of the wage reductions, Okano claimed that she should receive $10,692 that she was not paid when the company placed her on unpaid leave as a cost-saving measure in 2020.
She noted that the company's severance package offer – which she did not accept – had included an offer to pay her that sum.
Weatherill was unmoved by this argument, however, writing in his decision that an unaccepted offer "does not constitute a contractual obligation."
"It is clear on the whole of the evidence, and I so find, that the plaintiff accepted (salary reductions) in exchange for her continued employment – which was potentially in jeopardy because of the pandemic – and that there was no expectation that the reduction in her salary would be reimbursed to her," Weatherill wrote in his decision.
'THE PLAINTIFF LOVED HER JOB'
On the matter of severance pay in lieu of notice, Cathay Pacific argued that Okano had failed to take reasonable steps to mitigate the financial losses she would suffer as the result of her dismissal.
Weatherill again agreed with the airline, though only partially. He did not accept the company's suggestion that Okano should have taken advantage of its offer of outplacement services, concluding that it was unclear to her that she could receive such services without also accepting the severance package.
Likewise, the judge found it unreasonable to expect that Okano's job search would have begun while she was still employed by Cathay Pacific.
"The uncontroverted evidence is that the plaintiff loved her job with the defendant," Weatherill wrote. "There is no question that she was devoted to it and was devastated by the loss of it after almost 35 years of service. It is not surprising that she had significant difficulty coming to terms with her sudden termination."
Okano admitted that she did nothing to search for new employment before February 2021, Weatherill wrote, noting that she was "sad, unmotivated and had lost her confidence" after her last day of work.
"I find that, during the period February to June 2021, the plaintiff’s attempts to find new employment can best be described as 'passive,'" Weatherill wrote. "In February 2021, the plaintiff created a résumé and began searching various online job sites for openings. She received several notifications and alerts of job postings, but she considered that none of them were suitable for a person of her skill set."
For this, the judge reduced her severance in lieu of notice by three months, accepting Cathay Pacific's evidence that several suitable positions in the airline industry were available in February 2021.
"The plaintiff was either unaware of these opportunities or chose not to follow up on them because she decided that she had earned the right to look for employment outside of the airline industry," he wrote. "I disagree. In my view, it was incumbent upon the plaintiff to explore available positions in the very industry in which she had spent her entire working career."
Based on the amount of time Okano had worked for the company and her role within it, Weatherill determined that she was entitled to 24 months' compensation in lieu of notice for her termination.
That figure was reduced by three months because of her failure to take reasonable steps to secure a new job, and by a further two months for the two months' worth of notice that she did receive.
Thus, Weatherill awarded Okano 19 months' compensation as damages – less the three months Cathay Pacific had already paid to her under the Canada Labour Code – resulting in a total award of $168,609.28.
He also awarded her special damages of $1,764, representing the cost of a leadership course she took after her termination to bolster her résumé, as well as court costs.
