One of the most common questions employment lawyers receive is: “Was I wrongfully dismissed?” Closely related is the question: “How much severance am I entitled to?”

The answer depends on several factors, including the employee’s length of service, age, position, employment contract, and the circumstances of the termination.

What Is Wrongful Dismissal?

In British Columbia, most employees are employed for an indefinite period. This means there is no fixed end date to the employment relationship.

An employer generally has the right to terminate an employee without cause and does not need to provide a reason for doing so. A termination without cause is not, by itself, wrongful.

However, when an employee is terminated without cause, the employer must provide adequate notice of termination or compensation in lieu of notice (commonly referred to as severance). If the employer fails to do so, the employee may have a claim for wrongful dismissal.

It is important to note that an employer cannot terminate an employee for discriminatory reasons prohibited by the Human Rights Code, such as disability, religion, gender, family status, age, or other protected characteristics.

Notice and Severance

When an employee is terminated without cause, the employer must generally provide either:

• Advance working notice that employment will end; or
• Compensation instead of notice.

Most employers choose to provide compensation rather than requiring an employee to continue working during a notice period.

Wrongful dismissal occurs when the notice provided, or the compensation paid in lieu of notice, is less than the employee’s legal entitlement.

How Is Reasonable Notice Determined?

An employee’s entitlement on termination is typically determined by considering three potential sources of entitlement.

1. Employment Standards Act Minimums

Part 8 of the Employment Standards Act establishes mandatory minimum notice and severance obligations for many employers in British Columbia. These minimum entitlements are based primarily on an employee’s length of service and generally range from no notice for very short-service employees to a maximum of eight weeks’ notice or pay in lieu.

However, these provisions do not apply to every employee. Certain professions and occupations are excluded from parts of the Employment Standards Act. As a result, some employees may not be entitled to statutory notice or severance under the legislation, even though they may still have contractual or common law rights arising from the termination of their employment.

For employees who are covered by the Employment Standards Act, these are minimum standards only. Many employees may be entitled to significantly more notice or compensation under an employment agreement or at common law.

2. Employment Agreements

A written employment agreement may limit an employee’s entitlement upon termination.

To be enforceable, the agreement must comply with the Employment Standards Act and be properly drafted. Courts regularly find termination provisions unenforceable where they attempt to provide less than statutory minimum standards or are otherwise unclear.

Where a termination clause is enforceable, it may significantly reduce an employer’s liability and limit an employee’s entitlement to the amount specified in the contract.

3. Common Law Reasonable Notice

If there is no enforceable employment agreement limiting notice, the employee will generally be entitled to common law reasonable notice.

Reasonable notice is assessed based on factors such as:

• Employee’s age;
• Length of service;
• Position and responsibilities;
• Compensation;
• Availability of comparable employment given the employee’s experience, training, and qualifications; and
• Other circumstances affecting the employee’s ability to secure new employment.

Contrary to popular belief, there is no fixed formula for calculating reasonable notice. The assessment is highly fact-specific and depends on the circumstances of each case. While many employees receive significantly less, common law notice awards can range from a few weeks to as much as twenty-four months, which is generally considered the upper limit for reasonable notice.

How Are Wrongful Dismissal Claims Resolved?

Employees seeking only their minimum statutory entitlements may be able to pursue a complaint through the Employment Standards Branch.

However, claims for common law reasonable notice generally must be pursued through the courts or resolved through negotiation between the parties.

Many wrongful dismissal matters settle without the need for a trial.

When Is Notice Not Required?

There are circumstances where an employer may not be required to provide notice or compensation in lieu of notice, including where:

• The employee resigns or retires;
• The employee is dismissed for just cause;
• An enforceable employment agreement validly limits notice obligations; or
• The employee is employed under a genuine fixed-term contract that reaches its agreed end date.

Employers should proceed cautiously before relying on any of these exceptions, particularly allegations of just cause, as courts impose a high threshold before notice obligations are displaced.

Final Wages

Regardless of the reason for termination, employers remain responsible for paying all outstanding wages, including earned vacation pay and other amounts owing under the Employment Standards Act, within the applicable statutory timelines.

Resources

For more information about employee terminations, you may also wish to read:

• Understanding Severance Packages – Key considerations for employees reviewing a severance offer and employers preparing one.
• Avoid Costly Mistakes in Employee Terminations – Common termination errors that can expose employers to additional liability, including aggravated and punitive damages (click here).
• Best Practices for Terminating Employees – Practical guidance for employers on planning and carrying out a termination in a professional and legally compliant manner.
• Understanding Employment Contracts and Termination Clauses – The importance of properly drafted employment agreements and how they can affect termination obligations.
• Just Cause for Dismissal – An overview of when an employer may terminate an employee without notice or severance and the risks associated with alleging cause.

Need Help?

Whether you are an employee trying to determine whether a severance package is fair or an employer seeking advice before terminating an employee, our Employment Law Team can help.

Contact our intake team at 778.666.3723 or by email at litigationcoldcalls@rdmlawyers.com to schedule a consultation.