BC Severance Law

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.”

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 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 (discussed here). It is critical that you understand what you have agreed to in your employment agreement!

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.

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 working over the course of 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.