Employee Entitled to 24 Months’ Notice After Pandemic-Related Termination: Oakley v. Bounty Print Limited, 2024 NSSC 224

In Oakley v. Bounty Print Limited, 2024 NSSC 224, the Nova Scotia Supreme Court considered the case of a long-serving employee terminated during the COVID-19 pandemic. The decision touches on notice periods, mitigation obligations, and employer conduct in the context of pandemic-related layoffs.

A Termination Requiring Notice

Mr. Oakley had worked for the defendant printing company for 41 years when he, along with five other employees, was terminated in 2020 due to a decline in business resulting from the pandemic. Most of the affected employees had over a decade of service. The employer initially intended to place the employees on an indefinite layoff. However, after obtaining legal advice, the company learned that an indefinite layoff is treated as a termination without cause under Nova Scotia law.

The employer ultimately provided 8 weeks’ notice, but counsel for Mr. Oakley argued for more. At trial, the court found that Mr. Oakley was entitled to 24 months’ pay in lieu of notice, which reflects the high end of the reasonable notice spectrum in Canadian employment law. The court declined to go beyond the typical 24-month cap, noting that no exceptional circumstances justified an extension.

After determining the notice period, the court turned towards the issue of whether Mr. Oakley failed to mitigate his damages.

Mitigation: Declining Job Offers Affects Damages

After his termination, Mr. Oakley declined a job offer that would have paid approximately 81% of his former salary. Several weeks later, he also refused an offer to return to his former role at Bounty.

Bounty argued that Mr. Oakley had failed to mitigate his damages by declining comparable employment. Oakley’s counsel relied on the Supreme Court of Canada’s decision in Potter v. New Brunswick Legal Aid Services Commission, 2015 SCC 10, suggesting that older workers should not be expected to mitigate because of reduced employability. However, the court distinguished Potter, noting that unlike Mr. Oakley, Mr. Potter had not actually received any job offers. Mr. Oakley’s two comparable job offers provided evidence of his ability to mitigate, even at his age.

The trial judge held that it might have been reasonable for Mr. Oakley to reject the first offer for employment with a competitor, if he did so in anticipation of returning to Bounty. However, Mr. Oakley also turned down Bounty’s eventual offer to return, demonstrating lack of interest. As a result, the court reduced Oakley’s damages from the date of the first offer.

Pension Issues: Employer’s Failure to Issue Termination Statement

Mr. Oakley encountered difficulty accessing his pension because the employer had failed to issue a Statement of Termination, due to confusion over whether the employees had been laid off or terminated. He was ultimately forced to apply to the Deputy Superintendent of Pensions for a formal order that a Statement of Termination be issued.

Mr. Oakley claimed the legal costs of preparing that application, as well as damages for the decrease in value of his pension from the date when he wanted to access it until the date when he was able to. The court agreed that Mr. Oakley was entitled to recover legal fees as consequential damages. However, his claim for losses stemming from market fluctuations in his pension was denied because the Court found the pension had increased in value when properly calculated.

The employer’s failure to issue a Statement of Termination would later form a central part of Mr. Oakley’s argument for punitive and aggravated damages, alleging bad faith.

Allegation of Bad Faith Rejected

Mr. Oakley argued that the employer acted in bad faith because it had been advised by its legal counsel that it must terminate the employees and provide notice—therefore it knew that it must issue a Statement of Termination but repeatedly refused.  The court dismissed this argument, finding that the employer’s continued use of the term “layoff”—while legally inaccurate—reflected internal confusion rather than malicious intent. The employer’s mischaracterization was held to be reasonable in the context of the pandemic where companies did not know when they would be able to rehire.

Key Takeaways

Oakley v. Bounty Print Limited serves as a cautionary tale for employers navigating terminations during economic downturns. For employees, the case highlights the importance of carefully considering job offers after termination, as refusing to accept comparable work may reduce entitlement to damages. For employers, it is a reminder to consider legal obligations which may be different for layoffs and terminations.

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