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Overview of Employment Terminations and Reasonable Notice

August 27, 2023

Employment Terminations

Overview of Employment Terminations and Reasonable Notice

Employment Standards

When terminating an employee in BC and Canada, it is important to remember that the concept of “at-will” employment does not exist. The law surrounding the termination of employees involves far greater consideration and obligation on the part of the employer than in jurisdictions that subscribe to “at-will” employment. Each situation will turn on its own set of facts.

The Requirement to Provide Notice

Unless a non-unionized employee acts in a manner that would constitute “just cause” for termination (which is a narrow category of behaviour), or the employment relationship expires at the end of a fixed term, the employer is obligated to provide the employee with either:

  • Advance notice of termination.
  • Compensation in lieu of that notice.

The employer's obligation to provide the employee with reasonable notice of termination does not apply where:

  • The employee resigns their employment
  • The employment relationship is frustrated
  • There is just cause for termination of employment
  • The employment contract contains a valid term providing for the amount of notice to be given in the event of termination
  • The employment contract is for a fixed term

As it is often practically undesirable to have an employee continue to work after receiving notice of termination, paying out the notice period is the more frequent choice.

The notice of termination provided to the employee must be specific and unequivocal. Moreover, it must be clearly communicated to the employee.

In BC, there are three types of potential notice that the employer must give the employee at the time of termination of employment:

  • Statutory minimum termination notice or pay in lieu of notice.
  • Common law reasonable notice.

Alternatively, the parties may contract for a set period of notice, provided that period is not less than the statutory minimum requirements. Employers cannot contract out of the statutory minimum requirements.

Both unionized and non-unionized employees are potentially entitled to the minimum statutory notice and severance pay. Common law reasonable notice is potentially available to non-unionized employees, but not to unionized employees who have their employment governed by a collective agreement.

Statutory termination notice – BC Employment Standards Act

There is a statutory minimum period of termination notice that must be given according to length of employment, outlined in the BC Employment Standards Act. Where groups of employees are terminated with a short period of time, mass or group termination notice periods may apply. The minimum standards legislation applicable to the employee must be consulted before structuring a termination package.

Common law reasonable notice

The notice periods that have been held to be reasonable at common law have traditionally been much longer than the minimum standards termination notice period, sometimes greater than 24 months of notice. Unless the employment contract limits the notice period to the statutory minimum, or to another amount that is greater than the statutory minimum, the employer must provide compensation for the common law notice period.

In determining “reasonable notice” under the common law, the Courts will consider such factors as:

  • The length of service.
  • The age of employee.
  • The character of the position, including the degree of responsibility and the employee’s level of training and education.
  • The availability of similar employment, having regard to the experience, training and qualifications of the employee.

The employer has the choice of asking the employee to work through the notice period, or to pay compensation in lieu of such notice. If pay in lieu of notice is given, the employer is to pay the compensation to which the employee would be entitled as though the employee had worked through the notice period. The employer may also be required to continue medical and dental benefits to the employee for the duration of the notice period and pay for unused vacation time.

Contractual notice

An employer can control some of the uncertainties that might arise at the time of termination of an employee by clearly setting parameters in the original employment contract. While the employer cannot contract out of statutory minimums (such as minimum notice periods that must be provided on termination), contracts can be used to limit or exclude the common law concepts that would otherwise apply. For example:

  • A contract can specify that certain acts will constitute just cause or willful misconduct, effectively broadening the common law definitions of these concepts.
  • A contract may also set out what period of notice will be given, how payment on termination will be structured and how various types of incentive compensation will be dealt with on termination.

Unless the employee’s duty to mitigate is outlined in the termination provisions of the employment contract, mitigation will not apply to the termination provision amounts.

Note to Readers: This is not legal advice. If you are looking for legal advice in relation to a particular matter please contact one of our Employment & Labour group members.

We communicate Employer updates to our clients and readers on our Employer Resources Portal and through monthly Newsletters.

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Chris Drinovz

Chris Drinovz is a Partner at KSW Lawyers and the founder and leader of the Employment & Labour Group. His calling is to excellence through the mastery of his craft and tireless dedication to his clients. He is described as hard-working, analytical, trustworthy, and genuine. Chris works with business leaders and union and non-union organizations to solve workplace legal problems and achieve long-term solutions that align with his client’s values. He is a dedicated advisor and an experienced courtroom advocate with a track record of success.

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Jenson Leung

Jenson Leung and his team assists clients with all labour, employment and long-term disability matters, including wrongful dismissal, human rights, arbitration, insurance and privacy matters.

 

Jenson has extensive experience representing individuals, non-profits and business clients throughout the Lower Mainland. He regularly advises and assists clients in dealing with employment contracts, executive compensation, employee discipline/management, terminations, and long-term disability insurance denials.

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Jesse Dunning

Jesse Dunning is a dedicated litigator, whose areas of practice include employment/human rights law, labour law, and general litigation.  As part of his employment law practice, Jesse assists both businesses and employees with terminations, employment contracts, discrimination complaints and all manner of other employment issues. On the labour side, Jesse has assisted both unions and unionized employers navigate labour relations issues.

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Jesse’s general litigation practice includes a variety of matters, including...

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Junki Hong

As a member of the Employment & Labour Law Group at KSW Lawyers, Junki Hong practice focuses on employment law for employers and employees including wrongful dismissals, employment standards, employment contracts and human rights claims. He also advises clients with commercial litigation concerns such as shareholder disputes, lease disputes, contractual disputes and more.

Junki is a natural problem solver with a passion for helping others strategize and find resolutions to whatever issues...

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Michael J. Weiler

Mike Weiler has more than 35 years experience in the ever evolving world of employment, labour and human rights law. And experience in this area is critical to protect our clients—this is where law is not just a science but most often an art. Judgment is critical for our clients and that is what we bring to the table based on our years of experience. This means first and foremost knowing the law—keeping updated and current. Experience also means knowing the players in the game and their processes—the LRB, the Employment Standards branch, WorkSafeBC, the courts etc. It means not only seeing the...

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Darren Sall

Darren and his team assist clients with all Employment Law matters, including wrongful and constructive dismissal claims, just cause dismissals, severance package negotiations, executive compensation and buy-out scenarios, and share issues arising from the termination of employment.

Darren has over a decade of litigation experience working with individual, business and corporate clients throughout the Lower Mainland, particularly the South Fraser Region, and Alberta. He regularly advises on civil disputes of all varieties, on behalf of both businesses and individuals.

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Fayme K. Hodal

Fayme K Hodal and her team assist clients with all Employment law matters, including wrongful and constructive dismissals, dismissals for cause, executive compensation and buy-outs, and negotiation of severance packages.

Fayme has extensive experience working with individual, business and corporate clients throughout British Columbia and Alberta. She regularly advises on civil disputes of all varieties and prepares coverage opinions relating to private insurance disputes.

Fayme also assists clients with privacy law and defamation questions.

Fayme is a life-long West Coast local; she obtained her...

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