What is Severance?
“Severance” is a catch-all term used to describe the different kinds of compensation an employee can receive after being terminated by their employer. The vast majority of non-unionized employees in Alberta are owed what is called reasonable notice upon being terminated.
The right to reasonable notice or payment in lieu of notice has its source in the common law, or judge made law. In Alberta, the Courts have established that reasonable notice is an implied term of nearly every employee-employer relationship, even if you do not have a written contract.
How much am I owed?
How much notice or payment in lieu of notice you are owed depends on a broad range of factors unique to your situation. For simplicity’s sake, there are five key factors that Courts will look at, which the Courts call the Bardal factors, named after a case of the same name, in determining your notice period:
the age of the employee;
the length of time the employee has worked for the employer;
the nature of complexity of the employee’s duties and responsibilities;
the employee’s work experience and educational background; and
the availability of similar employment in a given geographical area.
Generally speaking, an older employee with a longer tenure will have more difficulty finding comparable work than a younger employee with only a year or two of experience under their belt. The same holds true for employees with specialized skillsets such as managers, professionals or skilled tradespeople, particularly if there is a shortage of work in their particular field or if the economy is slow. The Bardal factors are essentially guidelines that help the Courts estimate roughly how much time it would take for a terminated employee to find a comparable replacement position for comparable pay and in a reasonable location.
If an employer does not provide you with roughly 2 to 6 weeks’ worth notice of your termination per year you worked for them, they are likely obligated to provide you with payment in lieu of that notice, most commonly in lump sum format. Where you fall on this scale depends on the Bardal analysis discussed above. A longstanding, but perhaps outdated, rule of thumb is that the average employee is owed around 4 weeks of notice per year of service.
If you have recently been terminated and have been offered a severance package, or have not received a severance package whatsoever, we recommend contacting our office to schedule a phone consultation.
Lee McMillan is the founder and managing lawyer of Calgary Litigation, He specializes in civil litigation, employment law and class action law. Contact Lee today for an affordable one hour phone consultation.