Worker was in his 60s with 23 years of service; high pay and onset of pandemic made it unlikely he could find similar employment
A long-term employee in his 60s who was fired early in global pandemic has been awarded damages of more than $400,000 for wrongful dismissal by the British Columbia Supreme Court.
James Hawes, 65, was a senior representative for computer retailer Dell Canada. He was originally hired by Dell’s predecessor company in 1997. His employment contract included clauses that prevented him from competing directly with Dell or soliciting the company’s clients for a period of one year following termination of his employment.
Hawes’ job duties involved selling information technology to clients in the government and healthcare sectors. Dell paid him a base salary for meeting targets, which accounted for about half of his income, and a variable commission that usually accounted for the other half. He was successful at his job and regularly earned $300,000 or more per year.
However, Dell terminated Hawes’ employment without cause on March 25, 2020, just as sales in the government and healthcare sectors were beginning to drop because of the COVID-19 pandemic.
Following his termination, Hawes spoke repeatedly to contact he had within the industries he served about potential employment opportunities. However, nothing was available. He continued his search and received an interview for a sales position in March 2021, but he didn’t get the position. He also found job openings outside his industry, but most paid much less than what he had earned with Dell or he wasn’t qualified. Fourteen months after his termination, he still hadn’t found work.
Maximum notice entitlement claimed
Hawes sued for wrongful dismissal claiming entitlement to damages worth 24 months’ pay in lieu of notice. Dell argued that his notice entitlement should be closer to 18 months. The company also pointed out that the notice period was still active at the time of the hearing, so the final award should be reduced on the contingency that Hawes might still find work before the notice period concluded. If he did, there would be the risk of “double-dipping” in which Hawes would be earning income during the period for which he essentially received salary continuance — contrary to the purpose of common law reasonable notice, which was to bridge the gap from one job to the next.
The court noted that Hawes’ claim of 24 months’ reasonable notice was the “generally accepted maximum notice period,” although his 23 years of service was comparable to the long-service employees who received such a period. In addition, he was successful in his role and made a significant amount of money, suggesting that he would be difficult for him to find work with similar compensation levels. Given these circumstances, it didn’t matter if he was a manager or not because the character of his employment was comparable to management-level, the court said.
“While the pandemic does not automatically lead to longer notice periods, there is no question that it led to a general and significant economic downturn,” said the court.
The court also noted that Dell dismissed Hawes at the beginning of the COVID-19 pandemic that led to a “significant economic downturn.” When he was let go, sales in his sector were declining and continued to decline and the evidence showed that many of Hawes’ former clients had not made significant purchases since April 2020, suggesting that “the sales sector in which Mr. Hawes was employed has been adversely affected by the economic downturn caused by the pandemic.”
“While the pandemic does not automatically lead to longer notice periods, there is no question that it led to a general and significant economic downturn,” said the court.
The court found that factors such as Hawes’ lengthy service, his age, the character of his employment, and the tough labour market caused by the pandemic supported a longer notice period. In addition, the fact the he was limited in his job search by the non-compete and non-solicitation agreements to which he was subject to for one year also adversely affected Hawes’ ability to find work in his area of expertise. The court determined that Dawes was entitled to 22 months’ reasonable notice.
The court agreed with Dell that the lengthy notice period continued well past the date of its decision in the matter — the decision was issued 15 months after Hawes’ dismissal, leaving another seven months afterward — so it reduced the notice period by one months for the contingency that he would find another job during that period.
Interestingly, the court found that Hawes’ job search efforts didn’t satisfy his obligation to mitigate his damages, as simply checking in with industry contacts and not applying to certain positions due to the pay wasn’t a “constant and assiduous effort.” There was no evidence that Hawes directly called very many employers, wrote cover letters, or used a headhunting service to connect with potential employers. However, despite this, the court opted not to further reduce the notice period because Dell didn’t provide any evidence that Hawes would have found employment had his efforts been reasonable. The court noted that the evidence in fact suggested the opposite through Dell’s own decreased sales and no examples of available job opportunities.
Dell was ordered to pay Hawes the equivalent of 21 months’ salary and averaged-out commissions, less the amounts already paid as part of the termination. The total award was $473,238.
For more information, see:
- Hawes v. Dell Canada Inc., 2021 BCSC 1149 (B.C. S.C.).
