Layoffs:
During the pandemic, many employers had no choice but to temporarily lay off employees due to a lack of work. However, employers generally do not have the inherent right to do so under common law. Therefore, without a provision in the employment agreement, an employee could refuse a temporary layoff and instead assert constructive dismissal and demand termination pay. While no one is crossing their fingers for another pandemic (or anything else that may lead to more temporary layoffs), employees that have been laid-off should consider whether such a clause exists in their employment contract and, if it does not, they should consider claiming constructive dismissal to collect severance pay. An experienced employment lawyer will be well suited to assist you.
Termination Provisions:
Employees should also have their employment contracts reviewed to determine whether certain clauses are enforceable or not. For example, the law on termination clauses is evolving. A review of the termination provisions in an employment agreement could reveal that the clause is unenforceable such that an employee is entitled to common law severance pay, even though a contract contains a clause purporting to limit an employees entitlements to such pay.
Considering the power imbalance in an employer-employee relationship, adjudicators will typically interpret employment agreements in the employee’s favor. Therefore, without the right language in the termination provision, when an employer terminates an employee “without cause,” the employee may be able to claim significant damages for wrongful dismissal, up to 24 months (or more in rare circumstances) in common law notice, instead of being limited to the maximum 8 weeks provided for by the Employment Standards Code (Alberta).
This issue is frequently before the courts, so many termination clauses should be reviewed to determine their validity and to determine whether they correspond to the latest applicable common law decisions. If they do not, employees could claim large amounts of common law severance from their former employer for wrongful dismissal.
Payment of Bonuses upon Termination of Employment:
Many employers and employees are unaware that bonuses may also be payable upon termination of employment, even where the employer calls the bonus a discretionary bonus or the employment contract states that an employee’s bonus entitlement ends on the termination of their employment. Many companies award bonuses to their employees for retention purposes, so it is antithetical when these amounts must be paid to employees upon termination. The common law regarding this topic continues to evolve and thus, similar to termination provisions, employees should have the bonus provisions in their employment agreements reviewed by an employment lawyer, or separate bonus plan documents reviewed, to determine whether the employee may be entitled to receiving a bonus upon the termination of his or her employment.
At JSB Employment Lawyers, we are here to help employees maximize the severance pay they are entitled to. Call one of JSB Employment Law’s Employment Lawyers today for a free severance package review or for assistance with any other employment law matter.
