Q: Who is entitled to overtime?
A: In BC and most other provinces, most employees are entitled to overtime. “Managers” who meet the Employment Standards definition are exempt from overtime, along with a list of professions and occupations found in the B.C. ESA Regulation such as lawyers, doctors, “high tech professionals” etc. Titles or how the employee is paid (salary vs. hourly) are not determinative and given little weight.
REASONABLE NOTICE OF TERMINATION AKA “COMMON LAW SEVERANCE”
Q: What notice or severance is required when terminating an employee?
A: Non-union employees who are terminated “without cause” (see above for a discussion of “just cause”) will have two entitlements:
- To Employment Standards minimum notice or pay in lieu. Each province has its own scale based on service. In B.C. the minimum notice or pay in lieu is:
|Length of Service
|ESA Minimum Notice of Severance in Lieu
|3 months to 1 year
|1 year to 3 years
|More than 3 years
|One week per completed year to a maximum of 8 weeks
*Note: In BC, additional notice/severance must be provided on mass lay-offs of more than 50 employees at one location within a 60 day window.
In Ontario, employees with over 5 years of service with larger employers will also be entitled to “statutory severance pay”.
- Contractual notice or severance: if you have a valid termination clause (see discussion of termination clauses below), then the clause will define what additional severance is owing. Note it is legally possible, if clearly drafted, to restrict contractual severance to the Employment Standards minimum.
If there is no termination clause or the clause is invalid, the courts will award severance based on common law (i.e. judge created law) “reasonable notice period” (RNP)
Q: What is the Reasonable Notice Period (RNP) for an employee?
A: RNPs are set by individual judges on a case-by-case basis so awards do vary. In every case, the judge must consider, in rough order of importance:
- Length of service;
- The “nature of the position”: historically this has meant employees higher up in the employer organization will get more notice than those in lower level jobs with the same length of service;
- Availability of comparable employment: here the courts ask whether the employee has transferable skills which are in demand (factors that will lower the RNP) or rather has limited re-employment opportunities in their local market;
- Age: generally older employees in their late 50s and beyond will usually get a longer RNP than younger employees.
But other factors such as a disability, a language barrier etc. can be considered. This is only a very simple overview of “reasonable notice” and actual awards can vary greatly. The BC Court of Appeal has said 24 months is the upper limit of RNP awards.
Employers and employees need to consult an expert employment lawyer for an estimate of the RNP in each case.
Q: Can an employer give working notice of termination rather than paying severance?
A: Some termination clauses may clearly require only payment of severance e.g. “If we terminate your employment without cause, we will pay you an amount equal to 3 months of your salary”. But more commonly, both statutory minimum termination entitlements and contractual termination entitlements can be satisfied using working notice on whole or in part. The common law entitlement to “reasonable notice” can be satisfied with working notice. The employer giving working notice must maintain regular terms of employment during the working notice.
Q: What should be included in contractual severance?
A: A valid termination clause may define what is included in severance. Otherwise, under common law “reasonable notice”, all elements of the employee’s compensation package that would have been earned if the employee worked out the RNP must be included in the contractual severance package, unless there is a clearly communicated policy or agreement to the contrary. This includes benefits, pension or RRSP contributions, car allowances (in some cases) etc. Thus sales people earning commission are entitled to severance that takes into account commission over their RNP. Where bonuses would have been earned over the RNP if it was worked out, the employee will normally be entitled to receive them, absent very clearly worded and well communicated terms excluding such entitlement.
Employers who do not want to be liable to include bonuses in severance need to get expert assistance in drafting bonus plan terms to this effect.
Q: If a termination is effective immediately, is the employee entitled to a lump sum equal to compensation over the RNP?
A: Not necessarily. Severance for reasonable notice comes with two big catches:
- Until the employee settles their severance, the employee must use reasonable efforts to seek employment comparable to their former position (including as to role and pay); and
- Any re-employment or self-employment income earned during the RNP reduces the amount of contractual or common law severance owing. The exception would be an employee who was already earning side income from another source while employed and continues to earn the same level of other income after termination.
RESIGNATION AND “WRONGFUL RESIGNATION”
Q: How much advance notice do I have to give of my resignation?
A: If you have an employment agreement with a resignation clause prescribing the notice required, then that is what is required. If not, some provinces Employment Standards legislation prescribes minimum notice (typically 2 weeks) but most, including B.C., do not. The courts say employees must provide “reasonable notice” of resignation if they do not have a resignation clause but:
- The length of reasonable resignation notice is not as well established and is generally less than if the employer was terminating. The most important factor is how hard or time-consuming it will be to replace the employee and how important the employee is to the business’ operations;
- Even if the employee fails to give the required resignation notice, “wrongful resignation” claims are rare because the employer has to take reasonable steps to work around the early departure and only has a valid claim if it can show the lack of more advance notice caused a specific provable loss of profit—often hard to do.
Q: What happens if the employer terminates me immediately when I give advance resignation notice? Do I still get paid over my resignation notice?
A: Generally yes, unless the employer can invoke the right to terminate employment on less notice than the employee gave, in which case the employer will only have to provide severance in lieu of the required termination notice.
Q: What are employer obligations on statutory holidays in B.C.?
A: In B.C., with limited exceptions, employees who work 15 of the 30 days preceding a stat must receive:
- If they do not work the stat, an “average day’s pay” aka “stat holiday pay”;
- If they work the stat, time and half pay for hours worked plus stat holiday pay.
But there is no obligation to provide a day off in lieu of stats that fall on non-working days i.e. the weekend.
Q: What are the legal statutory holidays in B.C.?
A: As of 2023, they are: New Year’s Day, Family Day, Good Friday, Victoria Day, Canada Day, BC Day, Labour Day, National Day of Truth and Reconciliation (Sept 30), Thanksgiving, Remembrance Day and Christmas for a total of 11.
Boxing Day and Easter Monday are not legal statutory holidays.