Notice of Termination
BC employment laws stipulate that employees terminated against their will and through no fault of their own must be provided with adequate notice ahead of their termination (measured in weeks or months) or with a payment equivalent to income they would have earned over that notice period. Such payments are commonly referred to as “severance pay.”
An employee’s right to notice of termination or equivalent payment exists independently of any offer provided by an employer. The BC Employment Standards Act (ESA) outlines the minimum amount of compensation based on length of service that non-unionized employees in BC are owed. Employees entitled to compensation under the ESA cannot contract out of their minimum entitlement, regardless of what their employment agreement states.
Compensation for length of service under the ESA is as follows: 1 week is owed after 3 months of service; 2 weeks are owed after 12 months of service; 3 weeks are owed after 3 years of service; and 1 additional week is owed for each additional year of service (maximum 8 weeks).
It is critical that employees understand that their notice entitlement under the ESA is only the minimum amount and does not account for the greater “reasonable notice” severance pay sums most employees are entitled to under the common law. Compare, for example, the maximum 8 weeks of compensation outlined in the ESA with the maximum entitlement under the common law, which is generally 24 months.
Note that by using a well-drafted employment agreement, an employer can reduce an employee’s notice entitlement down to the minimum amount outlined in the ESA, thereby removing the employee’s entitlement to much larger sums owed under common law principles. It is critical that you understand what you have agreed to in your employment agreement!
The Severance Package / Offer
Employers will often provide a termination package that outlines the minimum sum owed under the ESA and then offers an additional sum representing a nominal improvement over this minimum amount. Many employees are entitled to a far greater sum under the common law! Such packages are also often accompanied by a tight timeline for acceptance, which is nothing more than a pressure tactic. Unfortunately, if an employee accepts their employer’s termination package – even a low-ball offer signed under a tight deadline – it can severely limit or entirely remove their ability to seek any further sums.
It is for the above reason that we recommend speaking with an employment lawyer before signing anything following a termination.
How Much Severance Pay Am I Owed?
In Canada, Courts assess common law severance by determining a “reasonable notice” period and then looking at wages and benefits an employee would have earned over that notice period. The assessment process is an art more than a science, with factors considered by judges summarized in the following passage from the seminal 1960 Bardal v. Globe & Mail Ltd. decision:
The reasonableness of the notice must be decided with reference to each particular case, having regard to the:
– character of the employment,
– the length of service of the servant,
– the age of the servant,
– and the availability of similar employment, having regard to the experience, training and qualifications of the servant.
The Art of Determining Severance
As discussed below, there is no simple formula that can be used to determine severance pay according to the common law. Instead, Judges will assess a number of key factors, giving each factor its due weight based on the specifics of each case.
While this means that it is impossible to know in advance exactly how much common law severance pay an employee is entitled to, it also means that we can use previous decisions (case law – the more similar the case to your particular situation the better) to determine a likely range of outcomes.
Severance Pay Tools Online?
“Can I use an online tool to find out how much severance pay I am owed?”
Online severance pay tools will not account for many important characteristics of your previous employment and your future employment prospects. They can be useful in helping you determine if your employer’s severance or termination package is broadly within the realm of what is reasonable but will rarely provide you with case law similar enough to your circumstances to serve as support in negotiating a higher severance package.
Can I Use ChatGPT to Figure Out Severance Pay?
In short, no; our firm has – on several occasions – addressed emails from clients containing AI-generated “case law,” often indicating a much higher notice/severance pay entitlement than what can reasonably be supported on the facts of the case. Though the information presented by ChatGPT is well organized, with citations that appear legitimate, they are nothing more than AI-created fake cases, with severance entitlements that often do not match the real decisions and judgments relevant to your case. For more information, click here for an article from Duke University Library on fake ChatGPT citations.
How to Assess Severance Pay Like a Lawyer:
There is no substitute for conducting legal research. Judges across Canada will determine reasonable notice periods based on an analysis of how the Bardal factors apply to each particular case. In conducting legal research, the goal is to find cases with characteristics as similar as possible to your situation. To assess severance pay, lawyers look at several such cases and determine a range of possible outcomes in terms of reasonable notice/severance pay, and then focus on determining the likeliest outcome within that range based on cases that may have particularly similar factors.
Though lawyers often use paid research tools and products to help them assess severance more efficiently, all Canadians have access to the fundamental tools they need to conduct their own legal research through CanLII, the Canadian Legal Information Institute (click here to learn more about CanLII).
The basic research process entails identifying the Bardal factors for your case, conducting numerous searches for cases with similar characteristics, reviewing the cases to ensure they are applicable (for example, a case that initially appears similar to yours may have an employment agreement with significantly different terms, rendering the case irrelevant), and compiling a list of awarded notice periods (i.e. severance pay awards).
In addition to helping you determine notice periods, conducting legal research and finding cases with characteristics similar to yours has the added benefit of allowing you to review the commentary of Judges, which can help you better understand how the relevant legal principles apply to your specific matter.
Though we always recommend speaking to an employment lawyer to ensure you have not missed anything critical in your analysis, we recognize, and it is our experience, that many British Columbians with claims for small sums, often stemming from very short employment terms, decide to represent themselves in negotiating with their employers. We hope the information provided here will be of some assistance in helping British Columbians better understand and assess their severance pay entitlements.
To limit an employee’s severance pay to the minimum amount stipulated in the Employment Standards Act and displace their entitlement to common law reasonable notice, employers must:
– Use a well-crafted employment agreement with precise language in the termination clause; and
– Execute the employment agreement in accordance with fundamental contract law principles.
These requirements can be difficult for even the most experienced employers to comply with, allowing keen employment lawyers to challenge what at first glance may appear to be rock-solid employment agreements. Book a consultation today to have an employment lawyer assess your entitlement.