Wrongful Dismissal And Reasonable Notice ExplainedDec 7 2018
Two of the most common questions we get asked is what is “wrongful dismissal” and what constitutes “reasonable notice”? Before those questions can be answered, some background on employment law is needed.
In British Columbia, unless an employee has a contract with a specific end date, the employment relationship is considered to be indefinite. Employers have the right to terminate indefinite employees and are not required to provide reasons (often referred to as “without cause”). This kind of termination is not deemed to be wrongful and may occur when an employee is believed to not be a good “fit” or because of a downturn in business. It is important to note that the decision to terminate cannot be related to a protected characteristic under the Human Rights Code (like sexual orientation, religion or disability).
Notice and Wrongful Dismissal
If an indefinite employee is terminated without cause, he or she is entitled to written notice that his or her job will end. If the employee is not provided with advance written notice – or the amount of advance notice is insufficient – he or she is entitled to compensation instead.
Wrongful dismissal is directly related to the notice given or the pay offered in lieu of notice. When an employer fails to a) provide reasonable notice or b) adequate pay in lieu of notice (commonly referred to as severance), the employee has a claim for wrongful dismissal.
Reasonable notice is assessed by taking the following into account:
- Employment Standards Act: section 63 sets out the mandatory minimum entitlements for BC employees strictly depending on length of service. This amount is the minimum that must be paid out to all employees who have been terminated without cause. It ranges from nothing to eight (8) weeks.
- Contract: if an employee has a valid employment agreement that sets out specific provisions related to notice upon termination, this may limit his or her entitlement. To be valid, it must match or exceed the minimums in the Employment Standards Act.
- Common law: this is based on previous court cases where judges have found what is reasonable given the employee’s age, length of service and availability of similar employment given his or her experience, training and qualifications. This applies to all employees who are terminated without cause and do not have valid employment agreements that specify termination obligations. Damages can range from the minimums set out in the Employment Standards Act up to twenty-four (24) months.
To obtain the minimum entitlements under the Employment Standards Act, an employee may file a complaint with the Employment Standards Branch. The Employment Standards Self-Help Kit can be found here. For reasonable notice under common law, employees must file a wrongful dismissal claim through the court.
When no notice or compensation is provided
There are certain circumstances where reasonable notice or compensation in lieu is not required, including if:
- The employee quits or retires;
- The employee is dismissed for just cause;
- Termination rights and obligations are already provided in an employment contract; or
- The employee is employed for a definite term.
Final wages, including any outstanding wages such as annual vacation pay, overtime, etc. must be paid within 48 hours after the last day the terminated employee works.
Employees: if you have been terminated and want to know what your entitlements are, we can help.
Employers: if you are considering terminating an employee and want to know what your obligations are and how to limit liability, we can help.