Severance Pay

B.C. employment standards state that:

Employers can end employment by:

Giving an employee written notice and/or payment based on how long they've been working

OR

Firing an employee for just cause – if an employer has just cause, they don't have to give notice or pay

When an employer terminates in the first way, the payment is termed “severance pay”. 

What is severance pay in BC?

Severance pay is regarded as a payment that compensates an employee for the loss of their job. 

Employee Severance Pay VancouverIf you are offered severance pay by your employer and you accept it, you can be terminated immediately – rather than first serving a notice period.

Severance pay is usually a lump sum payment to cover salary for a certain period of time but a severance “package” may include other compensation and benefits, such as:

  • Regular salary, commissions, and bonuses
  • Pension contributions
  • RRSP contributions
  • Medical and dental benefits
  • Fringe benefits (allowances for vehicles, cellphones, gym memberships, etc.)
  • Vacation pay

Example: Today you were notified by your employer that your employment is being terminated, effective immediately. Instead of giving you reasonable notice, your employer has opted to pay you 3 months salary (severance pay).

If you have been offered a severance package or are about to negotiate with your employer about leaving your employment, you probably want to know how much you are entitled to.

Speak to our experienced employment lawyers at Taylor Janis in Vancouver first to ensure that you receive what you are due.

Example: Your employment is terminated after 2.5 years of service. Your employer has offered to give you 2 weeks’ of your regular salary as is required under Vancouver Employment Standards. This is a wrongful dismissal. In fact, you are entitled to additional severance pay under what is called the common law.

Is severance pay mandatory in BC?

In British Columbia, severance pay must be paid by employers if certain conditions are not met. 

One of the major employment stipulations is that a “reasonable” notice period for termination must be provided to the employee.

If this cannot be provided, a severance package from the employer is regarded as a payout in lieu of reasonable notice. 

However, there are further guidelines that are detailed below.

Who qualifies for severance pay in BC?

Severance must be paid by your employer in Vancouver if an adequate notice period is not provided in writing to you AND:

  • You have completed a minimum of three months of continuous employment with the employer
  • There is no just cause to dismiss you
  • You do not wish to leave your employment
  • You do not quit or retire (i.e. leave on your own terms)
  • You do not work on an on-call or limited-term contractual basis
  • You are not offered an alternative position or employment
  • The circumstances are not out of the employer’s control (such as bankruptcy, for instance)

How much severance pay am I entitled to in BC?

This is the question that everyone wants the answer to. 

Fortunately, there are state and federal guidelines in place to help you calculate what you are due in the event of unwanted termination by your employer with no notice period.

Providing you have completed three months of continuous employment and all other conditions are met (as detailed above) you are entitled to something.

The longer you have served the company, the more you can expect from any severance package.

Here are some general guidelines that apply for employees in British Columbia:

  • After serving three months, you are entitled to one full week’s pay as severance
  • After twelve consecutive months of employment, you are entitled to two full week’s pay
  • After three consecutive years of employment, you are entitled to three full week’s pay
  • After each additional year of employment, you are entitled to a week’s full pay

So, if you have worked 10 years for an employer and you are terminated without reasonable notice, the absolute minimum severance pay that you would be entitled to is 10 weeks’ full pay.

In reality, a good employment lawyer may be able to claim much more for you.

Note that one week’s full pay is calculated as follows: the total of your wages over an eight-week period (minus overtime hours worked) divided by eight.

Do you get severance if you get fired in BC?

If you are fired, you are not entitled to severance pay if there was just cause for the termination. 

For instance, if you were caught stealing company property and were fired on the spot, no severance pay is due.

If you are wrongly accused and fired, it would be another matter that you would take up separately with your employment attorney in order to claim damages.

Note that if you quit your job voluntarily, you are not entitled to severance pay unless you have provided written notice and the employer terminates you before the intended departure date.

Find out how much severance pay you are entitled to in BC

Have you received an offer of a severance package and want to know if it is sufficient?

Maybe you are in negotiations with your employer and need some guidance on how much to ask for?

Many employees are entitled to much more severance than the minimums in the state guidelines that your employer will probably offer you. 

Each employment situation is unique. Do not assume that you are getting a fair deal.

A Taylor Janis employment lawyer can advise you during a confidential 30-minute telephone or video consultation about your severance pay rights.

Enquire now to book an initial consultation: 604-423-2646.

  • If your employment is terminated against your will and through no fault of your own (i.e. there is no termination with just cause) and you do not receive adequate notice from your employer, you are entitled to severance pay in BC. More Information

  • If you live in BC and are not a member of a union, your employer must generally provide adequate notice or payment in lieu of notice (severance) to terminate you without cause. More Information

  • Reasonable Notice is a legal term that refers to how much notice or time an employer must give you, the employee, of the date your job will be terminated. In some cases, employers may choose to pay out a severance package in lieu of reasonable notice. More Information