As the pandemic continues, and as we see more court decisions that analyze terminations that took place during the pandemic, we are gaining some clarity on how courts are viewing the impact the pandemic has had on a variety of factors.
A recent decision out of British Columbia, Yates v Langley Motor Sport Centre Ltd., 2021 BCSC 2175 (CanLII), addresses several pandemic/termination issues which will be familiar to many employers.
This termination situation arose out of what was initially a temporary layoff. The plaintiff Ms. Yates worked as an events coordinator and marketing manager for the defendant for approximately 8 months before being laid off in March 2020, due to the pandemic. Ms. Yates was 30 years old at the time of her layoff and made an annual salary of $60,000.
In July 2020, the employer told Ms. Yates that her return to work date remained uncertain and they would understand if she wished to seek other employment. The employer did concede that Ms. Yates had been terminated without cause and was entitled to notice.
Ms. Yates’ mitigation efforts
Between July 7, 2020, when Ms. Yates concluded she likely would not be returning to the defendant employer, and February 1, 2021, when she obtained new employment, Ms. Yates submitted approximately 37 applications for jobs in marketing and administration. She reemployed with an annual salary of $50,000.
The judge took into account the actual length of time it took Ms. Yates to re-employ when determining the appropriate notice period. It took Ms. Yates seven months to find comparable employment. There was no question that she made good mitigation efforts.
Ms. Yates’ notice period
An analysis of the usual factors to determine the notice period would suggest that Ms. Yates should have been entitled to a notice period of around 2 months. However, in reality, it took Ms. Yates seven months to re-employ. The judge took into account the significant impact of the pandemic on Ms. Yates’ job prospects and awarded her a notice period of five months. Recall that she had only eight months of service with the employer, that she was 30 years old and making $60,000. These factors would normally suggest a much lower award.
Impact of CERB on Ms. Yates’ entitlements
The defendant employer was able to deduct the $10,000 of CERB payments that Ms. Yates received during the notice period from their total notice payment owed to her. The judge ruled that Ms. Yates would not have to repay the CERB amount and that the CERB was meant to compensate her for lost income. Allowing her to have the CERB as well as the full notice payment would have amounted to a double recovery.
Aggravated and punitive damages
Ms. Yates claimed both aggravated and punitive damages for circumstances that will be familiar to many pandemic workers and employers: she was led to believe she may be recalled to work, but given no certainty as to when, she was not formally terminated and she was not provided with her statutory entitlements. Ms. Yates claimed that these actions led to mental distress.
The judge did not find that these actions on the part of the employer constituted a breach of the employer’s duty of good faith and fair dealing in the manner of dismissal. The employer was not intentionally misleading, as they simply did not know when Ms. Yates could be recalled to work.
While the judge noted that the employer could have done a better job of communicating with Ms. Yates, he did not find that their conduct rose to the level warranting punitive damages.
This decision sheds more light on how courts will treat common pandemic termination situations. In sum, we may see increased notice periods to reflect the reality of job searching during a pandemic, deductions from awards for CERB payments received by the employee and no additional damages for common pandemic conduct resulting from the employers’ own uncertainty regarding when normal operations will resume.