Vancouver Airline Manager Awarded $170K After Firing: B.C. Court

Okano v. Cathay Pacific Airways Limited

In May 2022, the B.C. Supreme Court considered the amount of compensation that a terminated airline employee was entitled to, after she was placed on multiple special leaves and fired in December 2020 due to the COVID-19 pandemic.

The court awarded her over $168,000 in severance, an amount equivalent to 19 months of her salary and pension contributions.

Facts

• Frances Turcic Okano is 61 years old and worked full-time for Cathay Pacific Airways Ltd. for nearly 35 years.
• Her experience was in sales and customer services, where she was promoted from a reservations agent to a manager role, and eventually became the most senior employee in her department.
• Cathay was hit hard due to COVID and the sharp decline for air travel, causing Cathay to introduce Special Leave Schemes (SLS). SLS’s reduced her salary by set amounts. Before COVID, Okano received a non-compounding allowance (NCA) and monthly pension contributions on top of her monthly salary.
• Cathay told Okano on October 13, 2020, that she was terminated, effective December 11, 2020.
• On October 14, 2020, Cathay offered Okano a severance package where Cathay would refund all of Okano’s SLS contributions in 2020 and offer outplacement assistance with a professional advisor.
• There was some discussion between Okano and Cathay about the outplacement assistance, but it was never finalized. Neither party followed up with the other about this assistance, and Okano never signed the severance package.
• In November 2020, Cathay introduced a third SLS to extend Okano’s salary reductions to the end of June 2021.
• Okano’s last day of work was on December 11, 2020.
• In early 2021, she received the basic severance required under the Canada Labour Code. The basic severance amount included the NCA, but not all her pension contributions.
• As of May 2022, 17 months after her termination, Okano was unable to find a new job, even though she hired and used a coaching consultant.

The Court’s Decision

As a middle manager, Okano received severance payment of her salary for 19 additional months, factoring in her NCA and pension contributions during that same period. While she was actually entitled to 24 months’ pay, the court subtracted the 2 months she already received from Cathay and reduced another 3 months due to other factors, explained below.

Lost Wages: The court found that Okano was not entitled to recover her unpaid or lost wages during the first two SLS, because she accepted them in exchange for her employment to continue and never raised any concerns when she was placed on each SLS. Since Okano did not accept the severance package to refund her SLS contributions made in 2020, Cathay was not obligated by contract to do so.

Employment Contract: The court also considered the employment contract that Okano signed in January 2020 where it allowed Cathay to unilaterally remove, suspend, substitute or introduce any discretionary payments and benefits without notice in its sole discretion, and that those changes would not breach the contract. This court enforced the contract despite an email that Okano received from Cathay in January 2020, stating that her new employment letter would not change her salary or benefits.

Duty to Mitigate: Okano had a duty to mitigate her losses by looking for alternate and comparable jobs. The court found that it was reasonable for Okano to not have searched for a new job until February 2021, about 2 months after her termination, and that Cathay should have done more to make sure she received the outplacement assistance offered, no matter if she accepted the severance package.

READ MORE
• How much is severance pay in British Columbia
• Severance packages for Cathay Pacific airline workers
• The Severance Pay Calculator

But in the end, the court reduced the amount of severance that Okano was entitled to receive. She could have explored available positions in the airline industry since February 2021 (which there were) because that was where she spent her whole working career, even though she did not want to return to it.

The court also discounted Okano’s damages by 15% because it found that there was a real and substantial possibility that she would find a new job before June 30, 2022, that was similar to her qualifications and experience.

Lessons for Employees

• Seek legal advice: Talk to an employment lawyer at Samfiru Tumarkin LLP before signing any employment contracts with your employer or if you lose your job. We can review your unique situation and determine what your rights are, calculate how much severance pay you are entitled to, and work to secure the severance package you are legally owed in B.C. We have helped tens of thousands of Canadians, including managers in the airline industry, get what they’re owed.
• Use the Severance Pay Calculator: Our firm’s Severance Pay Calculator can give you an idea of how much severance your employer may owe you, based on a number of factors.
• Don’t accept changes: Don’t be too hasty to accept changes to your job, such as special leave schemes or salary reductions. Consult our team first to find out what the implications may be.
• Raise concerns: Talk to your employer, preferably immediately if they make significant modifications to your job, like those mentioned above.
• Search for new work: When searching for a new and comparable job, be active, and search in the industry where you have the most relevant experience, even if that is the type of work you performed with your former employer.
• Use outplacement assistance: If your former employer offers outplacement assistance, take steps to accept and use it.
• Document your expenses: If you hire a coaching consultant to help with your job search, document the expenses as it may form part of your damages later