How Much Severance Pay Are You Owed in Alberta?

How Much Severance Pay Are You Owed in Calgary & Edmonton Alberta

The amount of severance pay due is a regular issue when an employer is terminated in Alberta.

However, it is perhaps not made a big enough issue in many cases. Too many workers in Alberta walk away from their jobs without being adequately compensated for their service. Employees often do not ask enough questions of their bosses or the law.

Almost all non-unionized employees in Alberta are entitled to some compensation if they are fired without cause – and often more than they are offered.

As an employee, it is very important to familiarize yourself with severance pay regulations in Alberta before you sign any paperwork with your employer. Eligibility for severance, minimum amounts payable, and what you should expect in terms of a package are issues that can greatly affect your immediate financial future.

Once you sign an agreement, there is no going back. You must understand your rights because you cannot rely on your employer to necessarily know, respect or protect them.

Whether you are worried about being terminated or have just been fired from your position and asked to sign a severance agreement, it is generally down to you to force the issue – with or without legal representation.

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Temporary COVID-19 changes to employment insurance in Alberta

Before we get into how your severance package affects unemployment benefits under normal circumstances, we need to recognize that many of us have been in anything but “normal circumstances” in recent times with the COVID-19 pandemic in Canada.

Consequently, there have been some temporary changes introduced by the federal government. These changes were introduced because of the increased number of layoffs during the pandemic and the difficulties in finding new employment that resulted.

Under an interim order from the government, employees can access EI benefits even after receiving a severance package. It states that for any person who was terminated on or after September 27, 2020, any lump sums paid would not impact the individual’s ability to access EI benefits. This does not apply if the severance was paid as salary continuance rather than a lump sum.

These temporary measures last only until September 25, 2021.

Must an employer pay severance if you are terminated in Alberta?

If you are terminated without cause in Alberta and not given reasonable notice in writing, severance pay is mandatory for most employees.

Despite what some employees believe, your employer does not need a reason to fire you. Providing you receive reasonable notice or severance pay in lieu of notice, the employer is within its rights unless the reason is discriminatory (age, race, religion, gender, etc.)

Minimum severance pay requirements are covered in Alberta’s Employment Standards Act. Note that many employers may pay this minimum amount believing that they are following the law but, in reality, employees can often claim more than the minimum entitlement by applying common law.

Providing you are a non-unionized employee, it’s generally best to discuss your situation with an employment lawyer if you are in any doubt.

If terminated for just cause in Alberta, can I claim severance pay?

If your boss fires you with “just cause”, i.e., with a valid reason usually related to a breach of your employment contract, no severance pay is due in Alberta.

Serious infringements, such as the theft of company property or the assault of an employee, are good examples where the employer may have no option but to dismiss an employee instantly. No notice or severance pay is required.

The problem is that many employers (and employees) in Alberta misunderstand and misapply the just cause rules – willfully or due to ignorance of the law. An employee who shows up late once or twice may be an annoyance to an employer and the behaviour may warrant a warning letter. But it is not a valid reason for immediate termination without notice or severance pay.

It is usually best to have your case reviewed by an employment attorney if you have been dismissed (allegedly) “with cause”.

How are severance packages calculated in Alberta?

Alberta’s Employment Standards Act outlines the minimum severance pay you are entitled to according to the length of service with an employer. The maximum is eight weeks’ severance pay and this only applies if you served for 10 years or more with the same employer.

However, under common law practiced in the courts of Alberta, you may be entitled to considerably more based on the following factors in addition to the length of service:

  • Age and health condition
  • Position and salary
  • Availability of similar employment
  • Industry type
  • Bonuses/commission/overtime pay
  • Benefits

Other factors may be considered, and common law severance can be as high as 24 months’ pay.

Get more detailed information on how severance pay is calculated in Alberta from our previous post or book a consultation with an experienced employment lawyer.

Is severance payable to temporary contractors in Alberta?

Severance pay is available to most full-time non-unionized and non-temporary employees in Alberta. Contractors do not usually receive the same benefits as full-time employees, such as vacation pay or sick leave – and the same applies to severance.

However, employees must be wary that employers often miscategorise employees as contractors (mistakenly or deliberately) and thereby avoid the payment of benefits and severance.

Just because an employer claims that you are a contractor does not necessarily make it so. We may be able to challenge this in the Alberta courts if you find yourself in this situation and your contract is terminated without just cause, notice or severance.

What if I only worked for the company briefly – do I still get severance?

This depends on your definition of “briefly”. Under the Employment Standards Act, you must have worked for a minimum of three consecutive months with the same employer.

If you worked at least three months, you must receive reasonable notice or severance pay. Your employer will probably offer you the bare minimum of two or three weeks’ pay if you are terminated after one or two years of employment.

Based on the circumstances and other factors concerning your employment, the courts may award you considerably more than this if you challenge it.

Do I have to agree to severance by the employer’s deadline?

When you are terminated, your employer may try to pressure you into signing a severance offer. A deadline may be cited, and you may be asked to sign and return the documents by this date.

If you find yourself in this situation, do not sign anything without having the details checked first. Remember that you have two years after the company deadline to claim severance from your ex-employer.

If you do sign the paperwork, you will waive your rights to challenge the offer and may never receive a fair severance package.

Discuss your offer with one of our employment lawyers. We will check it over and advise you if you are entitled to more.

Employees in Alberta often have to fight for a fair severance package.

The experienced employment lawyers at Taylor Janis are accustomed to assessing severance packages and helping you obtain the maximum settlement.

We can advise you during a confidential 30-minute telephone or video consultation about your severance pay rights and how much you are owed.

To arrange a one-on-one consultation and document review with one of our employment lawyers, please contact us today at (780) 428-7770 in Edmonton or (403) 474-0411 in Calgary.

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