16 Months Notice Period Reduced 2 Months Due to Future Contingencies;

In Spalti v MDA Systems ( 2018 BCSC 2296 ) Gomery J. assessed the reasonable notice period for a 55 year old salesman making $195K with 13.7 years service at 16 months. However because this motion for summary judgement was held only 4 months after termination , the judge applied contingency reduction of 2 months.

This is the judges’ reasoning :

Assessment of a contingency reduction

[35]        It is well established that consideration of a contingency reduction in the notice period is appropriate in the context of a notice period that is not yet close to expiring when judgment is given.

[36]        In an appropriate case, the notice period may be reduced to mitigate the possibility of double recovery.  Gray J. addressed this issue in Luchuk v. Starbucks Coffee Canada Inc., 2016 BCSC 830 (CanLII) at paras. 46-51 and observed:

[46]            Wrongful dismissal cases are awkward, because the claim arises when the individual has been dismissed without reasonable notice, and then there is a bit of a race. Naturally the person who was dismissed would prefer to have an award from the Court and then afterwards get a job, because they would have a windfall, in the sense of receiving income from two sources representing the same time period. Naturally the defense would prefer that the plaintiff had found a job before the court hearing, because if the plaintiff has replaced the employment with another job, then he or she will not have suffered the loss of their entire employment income for the notice period. This tension is always present in wrongful dismissal cases, and it is something that the Court has to be mindful of.

[37]        The reduction is driven by the court’s assessment of the likelihood that the plaintiff, exercising reasonable diligence, will obtain alternate employment before the notice period would have expired.  It is therefore relevant to consider the length of the unexpired portion of the notice period and the likelihood that the plaintiff will obtain employment that would be have to be taken into account, in mitigation of his damages, if the trial had taken place later.

[38]        Where a reduction is warranted, the cases cited by counsel all involved reductions of one or two months.  In Luchuk, the case was decided five months into an 18 month notice period, and Gray J. reduced the notice period by one month to reflect the contingency.  In Earl v. Canada Bread Company, Limited, 2007 BCSC 1574 (CanLII), the case was decided four months into a 17 month notice period and Ehrcke J. reduced the notice period by two months to reflect the contingency.

[39]        In this case, the matter is being decided four months into a 16 month notice period.  Absent a contingency reduction, the notice period still has approximately a year to run.  While Mr. Spalti faces substantial obstacles in his search for alternate employment, I have already noted that I do not think they are insurmountable.  It is possible that he will find work within the notice period that pays significantly less than he was earning with MDA, and partially mitigate his loss in that way.  In my judgment, a two month contingency is appropriate.

[40]        Taking this contingency into account, I conclude that Mr. Spalti is entitled to a damages award based on an adjusted notice period of 14 months.