Non-unionized employees in Alberta who have lost their job through no fault of their own may be entitled to severance pay. The Alberta Employment Standards Code sets out the minimum amount of severance you are entitled to, depending on the number of years you have worked with the employer.
Employers must pay their employees severance pay if the employer fires the employee. If you have been terminated, your employer must pay you severance pay where:
- The employer terminates you without cause (i.e., through no fault of your own);
- The employer constructively dismisses you (i.e., through a demotion, layoff, or toxic work environment);
- The employer incorrectly fires you “for cause”; or,
- The employer does not give you working notice or gives you working notice for too short a time.
If you have been fired for just cause, willingly quit your job or worked for less than 90 days, you will not be entitled to severance pay under the Employment Standards Code.
Minimum Notice Under the Employment Standards Code
According to the Employment Standards Code, employees in Alberta are entitled to the following amounts of severance pay:
- Nothing, if you have worked less than 90 days;
- One weeks’ pay if you have worked for more than 90 days but less than 2 years;
- Two weeks’ pay if you have worked for more than 2 years but less than 4 years;
- Four weeks’ pay if you have worked for more than 4 years but less than 6 years;
- Five weeks’ pay if you have worked for more than 6 years but less than 8 years;
- Six weeks’ pay if you have worked for more than 8 years but less than 10 years; or,
- Eight weeks’ pay if you have worked for 10 years or more.
This is the minimum amount of severance you may be entitled to. With the help of an employment lawyer or wrongful dismissal lawyer, you will likely be able to negotiate a severance amount that is much higher than the minimum provided in the Employment Standards Code. If you have been terminated, you should consider speaking with a lawyer to learn just how much you might be entitled to.
Contractual Severance Pay or Notice of Termination
While the Employment Standards Code sets out the minimum amount of severance pay you are entitled to, it is possible that your employment contract provides something greater. While your contract can provide you greater severance pay than the Employment Standards Code, it can never provide you with less. If your contract provides you less than the statutory minimum, the contract is illegal.
It is also important to review your contract to see if it limits your notice to the statutory minimum. Employers will often attempt this, but very few do it right. If you have been terminated, it is always worthwhile to have your employment contract reviewed by an employment lawyer to learn how it might impact your severance pay.
Alberta Employees Can Receive Common Law Notice of Termination
While your contract of employment may try to limit your entitlement to severance to only the minimums provided in the Employment Standards Code, few contracts do so successfully. What employers hope to avoid is having to pay common law notice of termination, which can far outweigh the minimum severance pay required under the Employment Standards Code. Common law severance is payment that a court can award to dismissed employees.
The minimum severance payment according to the Employment Standards Code goes only as high as 10 weeks’ pay. The common law can go as high as 24 months’ pay. In deciding how much common law notice to award, courts will consider:
- The employee’s age;
- The employee’s length of service;
- The nature of the employee’s position, including their salary; and,
- The availability of similar employment.
Monkhouse Law Wins 17 Months’ Severance Pay for Alberta Employee
In Paquette v TeraGo Networks Inc., 2015 ONSC 4189, Monkhouse Law represented an Alberta employee who was awarded 17 months’ pay following his dismissal without cause from a company in Calgary, Alberta.
The employee was 49 years old and had been working with the company for just over 14 years. He was dismissed from an upper-middle management position. When he was terminated, he was only paid 8 weeks’ salary. At trial, the employer argued that 10 to 12 months’ pay would be appropriate.
The court ultimately disagreed. In considering the employee’s age and skills, the length of his employment, and the availability of comparable or suitable employment, the court awarded the employee with 17 months’ pay. The Court of Appeal later determined that this payment included not only the employee’s salary, but also his bonus.
In winning 17 months’ pay for their client, Monkhouse Law significantly improved the amount the employee otherwise would have received from his employer.
This decision demonstrates how the severance pay provided in the Alberta Employment Standards Code can be significantly improved with the help of an experienced lawyer.
Contact an Employment Lawyer if You Have Been Terminated
If you have been terminated in Alberta, consider consulting a lawyer at Monkhouse Law to determine what you might be entitled to. There is a good chance your employer will not offer you everything you are owed. An experienced employment lawyer can ensure none of your entitlements are forgotten.
Monkhouse Law is an employment law firm focusing on workers’ issues. Give us a call at 416-907-9249 or fill out this quick form. We offer a free 30-minute phone consultation.