Termination Without Cause: Determining Reasonable Notice
An employee is entitled to a certain amount of notice (or pay in lieu of notice) when their employment is terminated without cause. Terminating an employee without just cause can be complex. Employers should be careful in making determinations about the amount of notice provided to a terminated employee in order to avoid claims for wrongful dismissal.
An employer that decides to terminate the employment relationship must keep the statutory minimum notice requirements under the Employment Standards Act in mind, as well as the common law notice requirements.
Under the BC Employment Standards Act, where an employer terminates an employee without just cause, the following amount of notice (or pay in lieu) must be provided:
- After three consecutive months of employment – one week’s pay;
- After 12 consecutive months of employment – two weeks’ pay;
- After three consecutive years of employment – three weeks’ pay, plus one week’s pay for each additional year of employment to a maximum of eight weeks.
In addition to the minimum statutory notice requirements, an employee may be owed a reasonable amount of notice at common law. Reasonable notice is based on the following four key factors:
- Length of service;
- Age of the employee;
- Type of position held, including salary, and whether supervisory responsibilities are present; and
- Availability of similar employment in the job market at the time of termination.
In many cases, reasonable notice of termination under the common law can amount to one month per year of service, or more.
It is important for employers to recognize that the period of common law notice which an employee may be entitled to can be varied by forming a contract of employment with the employee when hired. Employers can contract with prospective employees to provide less notice than the employee would receive at common law but should keep in mind that the amount of notice provided cannot be less than the amount that the employee is entitled to under the BC Employment Standards Act.
It should also be recognized that an employee’s length of service may be regarded as continuous by the court, despite breaks in the employee’s service. The best method for an employer to insulate itself against such claims is to address the period of service issue at the time when the employee is rehired (not when he or she is later fired). Simply documenting in the hiring materials, with evidence of the employee’s acceptance, that prior periods of service will not be recognized for any purpose goes a long way towards stopping such claims in their tracks. Again, this is an important factor for employers to take into account when calculating the amount of notice that an employee may be entitled to.
Information provided by Ryan Anderson, an employment lawyer with Mathews Dinsdale & Clark LLP. The information provided in this article is necessarily of a general nature and must not be regarded as legal advice. For more information about Mathews Dinsdale & Clark LLP, please visit mathewsdinsdale.com.