Termination with cause is reserved for serious workplace misconduct. In such a case, as an employee you are not entitled to notice of termination or severance pay. Almost every other scenario is classified as termination without cause. As an employer under the BC Employment Standards Act, you have the right to terminate an employee at any time for any reason as long as it is not discriminatory and you provide appropriate notice and/or severance pay. It must be noted however, that as an employee you are only entitled to notice and/or severance pay if you have been employed by that company for a minimum of 3 consecutive months. Additionally, as an employer you are not required to provide any supporting documents for a termination without cause.
It is important for both an employer and employee to know the guidelines respecting termination notice. Under the Employment Standards Act,
- An employee is entitled to a one week notice after three consecutive months of employment;
- After 12 consecutive months an employee is entitled to two weeks notice;
- After being employed for three consecutive years by the same company, an employee is entitled to three weeks notice
- An additional week of notice is added for every year following the third year, up to a maximum of eight weeks notice.
However, these are merely the statutory minimums. Depending on the language used in the employment agreement, the employee may be entitled to (significantly) more severance. Employers should pay careful attention to the drafting of their employment agreements, and employees should have their employment agreement reviewed prior to acceptance.
The severance pay guidelines are very similar to those of written notice. As an employee you are entitled to one week’s pay after three consecutive months of employment. After 12 months you are entitled to two week’s pay, after 3 years you are entitled to three weeks’ pay up to a maximum of 8 weeks.
As an employer you must carefully consider both options when deciding whether to give notice, severance pay or both. Giving notice can produce some unfavorable results because the employee may become unmotivated, resulting in subpar performance at work. This may also rub off on other employees as they may worry about their job security. It is also important to consider that if the employee gets injured at work during the notice period, they can claim workers compensation.
Due to these potential negative consequences, you may choose to put together a severance package. It is important that you put together a severance package that is deemed fair at the minimum. This is because if no notice is given and the employee regards the severance package as unsatisfactory, they can sue for wrongful dismissal. The court may then award more than what is indicated in the BC Employment Standards Act.
When notice and severance pay are not required
There are certain scenarios where an employer is not required to provide notice of termination or a severance package. This includes:
- If the employee has not worked for three consecutive months
- If the termination is for an on-call or temporary position or if the contract has expired
- If the employee quits/retires
Is there a deadline by which I have to sign termination papers or a severance offer?
There is actually no deadline for you to sign or accept a severance offer. You are able to pursue your rights with an employment lawyer for two years. By attaching a deadline, the employer is trying to pressure you into accepting what may be a bad offer.
How much severance am I owed?
Several factors are taken into account when determining how much severance an employee is owed. Unless the employment agreement specifically sets out what the severance will be, then the age of the employee, length of employment, position in the company, salary, benefits, and ability to find new employment are all factors which can influence the amount of severance due.
Should I file a claim with the Ministry of Labour?
Filing a claim with the Ministry as an employee may only result in you receiving the minimum severance pay under provincial law. In addition, once a claim is filed, you can no longer hire an employment lawyer to assist in your case.
I signed an employment contract, does that change anything?
There is the potential for an employment contract to limit your entitlements when being terminated. It is recommended that you consult an employment lawyer to review your contract to get a better understanding of your rights.
If you are an employer looking to terminate an employee without cause and would like to get more information regarding notice, severance pay, or the employment contract, you can book a consultation. In addition, if you are an employee who has just been terminated without cause and would like to pursue your rights, you can also book a call.