Severance pay, also known as “compensation for length of service” under the Employment Standards Act, is a fundamental aspect of employment law in British Columbia. It’s a right that employees should be aware of, especially in the event of job termination. This guide aims to provide a clear and comprehensive understanding of severance pay in BC, empowering employees with the knowledge they need to protect their rights. We’ll delve into the specifics of eligibility, assessment, exceptions and more, to ensure you’re well-equipped with the information you need.
Eligibility for Severance Pay
In British Columbia, you do not have any entitlement to severance under the Employment Standards Act if you have been employed with your employer for less than three months. At the three month mark, you might be able to claim severance pay if an employer terminates your employment. The amount of compensation increases with each year of employment, up to a maximum of eight weeks’ wages. However, there are exceptions to this requirement. For example, an employer is not obligated to provide severance pay or written notice when an employee quits, retires, or is dismissed for just cause.
An important consideration is whether you have an employment agreement in writing that limits your notice or severance to only the Employment Standards amount. If not, then you may be entitled to far more (which we call “common law reasonable notice”). However, common law reasonable notice comes with an obligation to “mitigate” your damages by looking for and taking comparable re-employment if it is available”. If you do get re-employed during the common law reasonable notice in your circumstances, then your damages may be reduced by the amount you earn from other employment in that reasonable notice period.
Assessment of Severance Pay
Whether you are entitled to notice or severance pay, and how much, will depend on several factors including the terms of your employment contract, the time you have worked for your employer, and your role to name a few.
Under the Employment Standards Act, you are entitled to at least two weeks’ notice or payment in lieu of notice if dismissed without cause after being employed for 12 consecutive months. This entitlement increases to three (3) weeks’ notice or payment in lieu of notice after three years’ employment, plus one additional week’s wages for each additional year worked up to a maximum of eight (8) weeks’ wages or notice.
Under common law, however, severance is often measured in months rather than weeks, and will be dictated by your contract, age, role, length of employment with the employer and the availability of comparable positions taking into account your skills, education and experience (see Bardal v. Globe and Mail).
An employer is not required to pay compensation for length of service or provide written working notice of termination if an employee is dismissed for just cause. The burden of proving that the employee’s conduct justifies dismissal for just cause is on the employer.
Burden of Proof on the Employer: When it comes to dismissing an employee for just cause, the burden of proof lies with the employer. They must demonstrate that the employee’s behavior or actions warranted termination without severance pay. This places a significant responsibility on employers to provide concrete evidence and justification in case they choose to dismiss someone under this category and the employee generally has to have been provided repeated warnings of unsatisfactory performance, or engaged in a very serious act of misconduct that irreparably fractured the relationship of trust with the employer.
No Compensation for Just Cause
Just cause refers to specific behaviors or actions by an employee that are serious enough to justify immediate termination without compensation. It typically involves violations of company policies, gross misconduct, dishonesty, or repeated performance issues.
Examples of behavior that may constitute just cause: Theft or fraud, Harassment or discrimination, Willful disobedience, Intoxication or drug abuse on the job, Falsification of records, Consequences of termination with just cause:
Termination for just cause results in no severance pay or written working notice being provided by the employer. The burden falls on the employer to prove that the employee’s conduct justified dismissal for just cause.
Burden of Proof on the Employer
In employment law, the burden of proof refers to the responsibility to provide evidence and establish facts in a legal dispute. With termination cases, as with most cases, the burden of proving the case rests with the employee (or plaintiff if there is a lawsuit). Once the employee has provided sufficient evidence or raised a valid argument, the burden then shifts to the employer.
Evidence plays a critical role in determining whether an employer had just cause for terminating an employee’s contract. Employers must be able to substantiate claims related to poor performance or misconduct through clear documentation and examples. Without sufficient evidence supporting allegations against an employee, it may be difficult for an employer facing a legal challenge from said individual’s end with success resolving such disputes favorably under scrutiny.
Resignation and Severance Pay
Under the Employment Standards Act, there’s no requirement for an employee to provide a notice of resignation. However, it is usually a requirement in most circumstances to provide some notice of resignation (whether under contract or the common law).
if an employee does provide a notice and the employer declines to accept it, the employee is entitled to compensation. This compensation is the lesser of the notice given by the employee or the employee’s statutory entitlement under the Act. This rule ensures that employees are not penalized if the employer decides to end the employment earlier than the date provided in the resignation notice.