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  • Writer's pictureLee McMillan

Severance Negotiations with Employers More Affordable Than Ever in Alberta.

With a few rare exceptions, most mid-to-large sized employers seldom have your best interests at heart when terminating your employment. To them, your departure represents a potential financial liability. They have been briefed on the law by a team of employment lawyers and will use this knowledge to craft a separation package that either grants you your bare minimum entitlements, or puts you at the low end of the spectrum with respect to your owed severance.

How and why can they get away with this? Because they are hedging their bets that you will not take the necessary steps to enforce your rights. They know that they have the patience and resources to see the matter through to litigation, and you do not.

This is because, up until recently, a sizeable portion of employment law claims fell within the financial jurisdiction of the Alberta Court of King’s Bench (the “ABKB”) rather than the Alberta Court of Justice (“Small Claims Court”). The ABKB is Alberta’s superior trial court and is geared towards complex cases, often between large corporations, and often involving tens of millions of dollars. With complexity comes strict procedural rules, interlocutory applications, lengthy filing deadlines, and increased costs/legal fees.

Conversely, employment law claims filed in Small Claims Court are relatively streamlined. After a lawsuit is filed, the majority of claims are sent directly to trial after both parties have participated in a mandatory pre-trial conference, essentially a quasi-mediation lasting no more than an hour.

The type of red tape associated with a ABKB lawsuit has traditionally been an employer’s best friend. A claim that might take six months to go to trial in Small Claims Court, might take three years in the ABKB. A claim that might cost a few thousand dollars to settle in Small Claims Court, might cost tens of thousands in the ABKB. Sadly, the go-to strategy for many employers, particularly since the Covid-19 pandemic, has involved a of combination of ‘waiting you out’ (delay) and ‘bleeding you dry’ (depleting your savings).

Fortunately, recent amendments to section 9(1) of the Provincial Court Act have resulted in the Government of Alberta choosing to double the financial jurisdiction of the Small Claims Court from $50,000.00 to $100,000.00. This new limit covers a sizeable proportion of claims that cross our desk on a weekly basis. Not only will this amendment help to drastically streamline cases that do have to go to court, it promises to help dissuade employers from engaging in hard bargaining tactics at the initial stages of negotiation (i.e. before a lawsuit is filed).

If you are stressed about the prospect of challenging your employer for a better severance package, speak to one of our employment law specialists. We can guide you through the ins-and-outs of a severance negotiation and provide you with a definitive recommendation regarding next best steps. Our ultimate goal is to provide you with a sensible plan that makes sense from a costs-benefits perspective.

Lee McMillan is the founder and managing lawyer of Calgary Litigation. He specializes in civil litigation and employment law in Alberta. Contact Lee today to schedule a phone consultation lasting up to one hour.

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