Wrongful dismissal

How BC law treats it

BC has no at-will employment. An employer can end employment without cause, but must give notice or pay in lieu. The Employment Standards Act, RSBC 1996, c 113, s. 63 sets the floor: after three consecutive months of employment, one week, rising with service to a maximum of eight weeks after eight years. A contract cannot go below these minimums. Unless a clear and enforceable termination clause limits it, every employee dismissed without cause is also entitled to reasonable notice at common law. Courts assess it on the Bardal factors: age, length of service, character of the employment and availability of similar work (Bardal v Globe & Mail Ltd (1960), 24 DLR (2d) 140 (Ont HC)). Damages cover lost salary, bonus and benefits over the notice period, reduced by what the employee earns in mitigation. Where the employer acts in bad faith in the manner of dismissal, the court can award additional damages (Honda Canada Inc v Keays, 2008 SCC 39). Just cause is a high standard, judged on the whole context of the misconduct (McKinley v BC Tel, 2001 SCC 38). A unilateral, substantial change to pay, duties or location can be a constructive dismissal (Potter v New Brunswick Legal Aid Services Commission, 2015 SCC 10). Where 50 or more employees at one location are terminated within two months, ESA s. 64 requires group termination notice of 8 to 16 weeks. Claims are brought in BC Supreme Court, Provincial Court or the Civil Resolution Tribunal depending on value, generally within the two year basic limitation period (Limitation Act, SBC 2012, c 13, s. 6). Federally regulated employees may instead file an unjust dismissal complaint under s. 240 of the Canada Labour Code.

What it means for your business

A poorly drafted employment contract can turn a two week termination into a year or more of salary. BC employers who want predictable termination costs need a clear, enforceable termination clause that meets the ESA, signed before employment starts. Alleging cause without strong evidence, or treating a departing employee harshly, increases exposure. For founders and buyers, accumulated common law notice liabilities affect business valuation and the structure of an acquisition. Example: A Burnaby distributor dismisses a 52 year old sales manager with 15 years of service and pays only the eight weeks the ESA requires. Because her contract has no termination clause, she sues and recovers damages based on a much longer common law notice period.

Risks and common mistakes

Assuming paying the ESA minimum ends all liability when the contract has no enforceable termination clause. Alleging just cause for poor performance without warnings, documentation or a fair chance to improve. Introducing a new contract with a termination clause mid-employment without fresh consideration. Cutting pay or changing duties substantially without consent, triggering a constructive dismissal claim. Ignoring ESA group termination notice when laying off 50 or more employees at one location.