Employee Dismissals and Wrongful Dismissal
Payment in Lieu of Reasonable Notice
The amount to be paid in lieu of reasonable notice (known as severance) is based on the concept of “reasonable notice.” Workers to whom the ESA applies are entitled under the ESA to a minimum amount of reasonable notice. Courts, however, in many situations, defined higher levels at common law.
Determining the amount of severance required by the common law involves judgment, and is in the discretion of the court. This means it is difficult to predict the precise amount a particular individual will receive if the case was to proceed to a trial in court. An experienced employment lawyer will review legal cases to determine an approximate “reasonable notice” period. The lawyer will then need to know the compensation that the employee would have received, if he/she had continued to work through the reasonable notice period. Based on this, and considering other factors the lawyer considers relevant, an employment lawyer can then calculate the damages that the employee would have been entitled to if he/she had continued to be employed during the reasonable notice period. It is important that you be fully honest with your lawyer, and that you share with your employment lawyer the full context and circumstances of the case. This is because sometimes, even if you’re not sure of their significance, surrounding facts or circumstances may affect the lawyer’s assessment of the case.
Compensation during the reasonable notice period generally includes salary, benefits, pension, and other compensation that the employee would have received, if he/she had continued to be employed during the reasonable notice period. If the employee was not provided with severance pay or given working notice, or was given inadequate working notice or inadequate severance pay, the potential may exist to claim the shortfall in court.
The potential exists in British Columbia that an employee may be entitled to compensation for loss of a bonus during the notice period. This assessment will require a consideration of whether the bonus was discretionary or based on quantifiable criteria, and whether the employee would have likely received a bonus had he/she worked during the notice period.
Courts have wide discretion to determine the appropriate damages to which an employee may be entitled, based on evidence of the plaintiff’s pre-dismissal earnings. Davidson v Tahtsa Timber Ltd, 2010 BCCA 528. There are some situations, such as in cases in which an employee’s earnings in the years prior to dismissal have varied, or in which the employee has or would have earned a variable income (even within the relevant notice period), in which a British Columbia court may calculate damages by averaging the employee’s annual wages. For example, see: Krewenchuk v Lewis Construction Ltd,  BCJ No 1553 (SC), Goodkey v Dynamic Concrete Pumping Inc, 2004 BCSC 894, O’Dea v Ricoh Canada Inc., 2016 BCSC 235.
A worker who is dismissed at the end of a fixed-term employment contract has likely simply completed his/her contract, and there is generally no further entitlement to severance pay (unless the contract specifies otherwise). Sometimes, other factors can lead to greater entitlements, such as continued renewals of a fixed term contract.
If the amount of notice or pay in lieu of notice is not specified in the employment contract, or if the employment contract itself or those provisions of it are invalid, then employees, dependent contractors, and independent contractors who are dismissed part way through a fixed term contract may be entitled to damages for breach of the contract.
If at least 50 workers were terminated at once, the ESA may entitle the employee to receive additional notice.
In rare cases in which the employee is entitled to more notice (or severance in lieu) under the ESA than under the common law, and the employee was dismissed in the past 6 months, then consideration should be given to filing a claim with the Employment Standards Branch.
See also: Duty to Mitigate.
To schedule a consultation, please contact us.