Terminating an employment contract can be challenging for employers and their staff. In Alberta, that’s true for more reasons than just the complexities surrounding the end of a working relationship. Under provincial law, unless just cause for termination exists you must compensate the employee with termination or severance pay. However, working with a severance package lawyer in Edmonton can help you navigate these complex laws to help protect your business.

An employment lawyer in Alberta can help you properly structure a severance package designed to limit your liability. Firing an individual for cause means you owe the ex-employee nothing—but many other terminations require notice periods or pay in place of that notice (also known as “pay in lieu of notice”). Misunderstanding the law and paying out too little—or not at all—can put a business at risk of facing time-consuming litigation from former employees seeking more money.

Here’s a quick look at what employers need to know in this area.

Giving Notice for Termination

The law generally requires that you provide notice of your intent to terminate the employment of a staff member. The notice period corresponds to various factors, including the duration of the employee’s service, their age, and their position in the company. Notice periods don’t apply to firing for cause, but you should document those situations carefully.

If you provide the proper notice and allow the employee to work through their notice period, you do not legally have to give a severance package. However, because working notice is often undesirable for both the employer and the employee, most employers will present the employee with a severance package instead of working notice.

Calculating Pay in Lieu of Notice

As an employer, you have the option to offer ‘pay in lieu of notice,’ which means you can provide compensation to the employee instead of requiring them to work the full notice period. It is vital to calculate this pay correctly based on the individual’s current wages, their period of service, and other factors. Although the Employment Standards Code only requires up to eight weeks of termination pay, common law judgments could mean you pay out months or even a year or more of compensation as severance.

Remember that “termination” and “severance” are different, so you must meet your obligations to the law and negotiate. Paying the correct amount is critical to avoiding a dispute in the future, and our team can help. Don’t forget you also face a time limit to provide termination pay upon the conclusion of the individual’s last day of employment.

Find Help Navigating These Complex Scenarios

When you require help from an employment lawyer in Alberta, Lypkie Henderson is here to support you with years of experience. Our in-depth understanding of Alberta employment law can help avoid contentious negotiations and litigation. Take this opportunity to develop confidence in your procedures and better protect your business – speak with an employment lawyer in Edmonton today.