For Employers

Notice and Severance Requirements when Dismissing or Firing an Employee

Are you about to let an employee go?

Are you certain that you understand your obligations with respect to notice, and severance pay in lieu of such notice?

Generally, when an employee is let go without just cause, the employer must provide either advanced working notice of the termination or pay in lieu of such notice. Pay is lieu of notice is also known as severance.  An employer has the option of providing the employee with a combination of advanced working notice and severance.

It should be noted that severance is normally spoken of in terms of time rather than dollar figures. This is because severance is actually pay in lieu of the notice, which otherwise would have been provided to the employee. When severance is calculated, it is based upon the amount of notice the employee should have received.

How much advanced working notice or severance is an employee entitled to?

In British Columbia, the Employment Standards Act sets out minimums for notice and pay in lieu of notice. It is important to emphasize that the Employment Standards Act only sets minimums. Frequently, the entitlement to advanced working notice or pay in lieu of notice is determined by precedent — that is, previous court decisions. Based upon the precedents set out by courts, employees are often entitled to advanced working notice or pay in lieu of such notice exceeding the minimum in the Employment Standards Act. The most useful precedent court cases are those dealing with employees similar to the employee in question.

In determining notice or severance entitlements, the Courts have considered four main factors:

  • character of the employment
  • employee’s length of service
  • employee’s age, and
  • availability of alternative employment.

Of these four, primary consideration has been given to the character of the employment and the employee’s length of service. Courts have tended to adjust the notice or severance entitlement up for employees that have a longer length of service, and for employee’s that had more responsibility in their employment. By looking at cases dealing with an employee similar to the one in question, there will typically be a range of severance awards that can be used to predict the severance entitlement for an employee.

Finally, and perhaps most importantly, notice and severance entitlements can be dealt with by way of an employment contract between the employee and the employer. Subject to limited exceptions, these clauses are often enforced by the courts providing they meet the minimums set out in the Employment Standards Act.

As mentioned, advanced working notice or paid in lieu of such notice must be given to an employee where an employee is dismissed for reasons other than just cause. If there is just cause for the dismissal of an employee, then the employee is not entitled to severance. And what is just cause for dismissal? Well, that is a very intricate and complicated question for later blog posts.

If you considering the dismissal of an employee, and need advice about your obligations, please don’t hesitate to contact us for a consultation. We can advise you about your rights and responsibilities and provide options for making your personnel transition go more smoothly.

 

 

This blog is produced by Waterstone Law Group LLP. This blog is intended for information purposes only and is not offered as legal advice for a specific claim. Subscription to or use of this site does not establish a solicitor – client relationship between the user and Waterstone Law Group LLP or any of the individual contributors. For advice relating to your employment law claim, please contact us to arrange for a consultation.

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