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Severance Pay

For Employees

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).

Notice or Pay

Employers have the option to provide a written working notice of termination instead of severance pay. They can also choose to provide a combination of both. This means that instead of paying you a lump sum when they end your employment, your employer can give you a written notice and let you continue to work for a certain period; this is called “working notice”). The length of this period (or the combination of notice and pay) increases with the employee’s length of service, reflecting the general principle that longer-serving employees deserve more notice or pay.

Exceptions to Severance Pay

There are certain exceptions where an employer is not obligated to provide severance pay or a written working notice of termination. These exceptions include situations where an employee voluntarily quits, retires, or is dismissed for just cause. “Just cause” means serious misconduct that justifies ending the employment without notice or severance pay. It’s important to note that the employer has the burden of proving just cause.

Just Cause

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.

Conclusion

Understanding your rights to severance pay is crucial as an employee in British Columbia. Ascent Employment Law is here to guide you every step of the way. We specialize in employment law and are committed to advocating for employees’ rights. If you feel you’re entitled to severance pay or if you have any concerns about your employment situation, don’t hesitate to reach out to us. We understand the stress and uncertainty that can come with job termination. Our dedicated team will work tirelessly to ensure you receive the compensation you’re entitled to and the respect you deserve.

The right team, dedicated to your success