Termination Without Cause: How to Maximize Severance
Being terminated from a job can be one of the most stressful moments in a person’s career. In British Columbia, employers are legally permitted to dismiss employees without cause, but they must provide proper notice or severance pay. The Employment Standards Act (ESA) sets the minimum entitlements, while common law, developed through court decisions, often requires significantly more.
This article explains what termination without cause means, the difference between ESA minimums and common law entitlements, and what employees and employers should do to protect their rights.
What Is Termination Without Cause?
Termination without cause occurs when an employer ends an employment relationship for reasons other than serious misconduct.
Common examples include:
- Business restructuring or downsizing
- Financial pressures
- Changes in company direction
- Performance concerns that don’t amount to “just cause”
In these cases, the employee has not engaged in behaviour that justifies immediate dismissal. Instead, the employer must provide reasonable working notice or severance pay in lieu of notice.
ESA Minimums: The Legal Floor
The Employment Standards Act sets the minimum notice or termination pay that must be provided:
- After 3 months: 1 week of notice or pay
- After 12 months: 2 weeks of notice or pay
- After 3 years: 3 weeks, plus 1 additional week per year of service thereafter, up to a maximum of 8 weeks
These are statutory minimums; employers cannot go below them. However, they are often far less than what employees are entitled to under common law.
Common Law Notice: Often Much Higher
In most cases, courts award common law reasonable notice that far exceeds ESA minimums, sometimes by months or even over a year. To calculate this, courts apply the Bardal factors, which include:
- Length of service: Longer service generally means more notice.
- Age of the employee: Older employees may face longer job searches.
- Nature of the position: Senior or specialized roles often receive longer notice.
- Availability of similar employment: The tougher the job market, the longer the notice.
Example:
An employee with 10 years of service might receive only 8 weeks of termination pay under the ESA. At common law, however, a court could award 10–12 months or more, depending on the circumstances.
Contracts Can Limit Common Law, If They’re Valid
Employers sometimes include termination clauses in employment contracts to limit entitlements to ESA minimums. These clauses are enforceable only if they are properly drafted and comply with the ESA.
Many termination clauses fail to meet this standard, and if a court finds a clause unenforceable, the employee is automatically entitled to full common law notice.
As Christopher Achkar, employment lawyer and founder of Achkar Law, explains:
Many B.C. employees mistakenly accept ESA minimums, unaware they could be owed months of additional pay under common law. Employers also face significant risks if they underestimate notice obligations.”
The 3-Month Probation Threshold
Under the ESA, employees are not entitled to termination pay until they have worked at least 3 consecutive months. This period is often referred to as a “probationary period.”
However:
- Employers must still act in good faith and cannot dismiss employees for discriminatory or retaliatory reasons.
- Courts expect that probation terms are clearly set out in writing and that employers conduct a good-faith assessment of performance.
Just Cause vs. Without Cause
If an employee is terminated for just cause, no notice or severance is required. However, this is a high legal threshold and applies only in cases of serious misconduct, such as theft, harassment, or chronic dishonesty.
Most terminations in B.C. are without cause, which means employers must provide notice or severance.
Example Scenario: The Difference in Practice
Consider a 55-year-old manager with 12 years of service:
- ESA entitlement: 8 weeks of notice or pay
- Common law entitlement: Up to 12 months or more, depending on the Bardal factors
This gap can amount to tens of thousands of dollars, which is why signing a severance package without legal advice can be a costly mistake.
What Employees Should Do
If you have been terminated without cause:
- Do not sign anything immediately.
- Review your employment contract carefully.
- Seek legal advice to assess whether you’re entitled to more.
- Keep records of your job search; courts expect you to make reasonable efforts to mitigate your losses.
What Employers Should Do
For employers, relying solely on ESA minimums may not be enough. To reduce legal risk:
- Draft clear and enforceable termination clauses.
- Consider the Bardal factors before finalizing severance offers.
- Provide written notice or pay in lieu that meets or exceeds legal standards.
- Consult with an employment lawyer to avoid wrongful dismissal claims.
How Achkar Law Can Help
At Achkar Law, we help both employees and employers address termination without cause.
- For employees: We review severance offers, assess common law entitlements, and negotiate for maximum compensation.
- For employers: We draft compliant contracts, assess risk, and defend against wrongful dismissal claims.
Speak to an Employment Lawyer Before You Sign or Terminate
Whether you’re an employee who’s just been let go or an employer preparing for a termination, understanding your legal obligations and entitlements can make a life-changing difference.
At Achkar Law, we help clients across British Columbia manage termination without cause with clarity and confidence.
Contact Achkar Law
Contact us today for a consultation. We’ll review your situation, explain your options, and help you move forward protecting your financial interests and reducing legal risk.
Call toll-free: 1-800-771-7882 | Email: [email protected]
The article in this client update provides general information and should not be relied on as legal advice or opinion. This publication is copyrighted by Achkar Law Professional Corporation and may not be photocopied or reproduced in any form, in whole or in part, without the express permission of Achkar Law Professional Corporation. ©