Employment standards – Termination and lay-off

Employees who wish to end their employment must give written notice to the employer. The length of notice period is based on how long they have worked for the employer:

Table 1. Employee notice period needed for length of employment

Notice that is longer than the minimum period may have an impact if an employer pays out the notice period. See the section, After a resignation notice is given.

The notice must be:

• in writing and addressed to the employer
• given in person, sent electronically or otherwise provided to the employer
• for the correct notice period or longer

If an employee continues to work after the resignation date provided, then the resignation notice is no longer valid. The employee continues to be an employee until either the employee or employer provides a new termination notice.

The employer may also decide to pay out termination pay for the notice period rather than have the employee work during that time. This is sometimes called expediting termination. The amount an employer needs to pay depends on the length of the notice the employee gave and how it compares to the notice the employer would have been required to provide to end employment. If the employee resignation notice is less than what the employer is required to give, the employee provided resignation date is used in calculating termination pay. If the resignation notice is more than what the employer is required to give, employers would follow termination pay rules outlined under Employment ended by employer below.

Example – Paying out the notice period

An employee has been working for an employer for 11 years and they give resignation notice. If the employer wants to pay out the employee, we need to look at the employer termination notice that would have been required to terminate that employee (see Termination notice in Employment ended by employer section below). For an employee with more than 10 years of service, the employer would have been required to give 8 weeks of termination notice.

To determine the pay out amount, compare the employee's resignation notice to 8 weeks. If the resignation notice is less than 8 weeks, the employer needs to pay out the resignation notice period. For example, if the employee gave 3 weeks of notice, the employer would pay 3 weeks of termination pay. If the resignation notice is more than 8 weeks, then the resignation notice would be reduced to 8 weeks. For example, if the employee gave 10 weeks of resignation notice, the employer would pay 8 weeks of termination pay.

Employees are not required to give resignation notice if:

• they have been employed for 90 days or less
• they work in construction or brush clearing
• there is a different established custom or practice in their industry respecting terms of employment
• continuing employment would endanger the employee’s personal health or safety
• the employment contract is impossible to perform due to unforeseeable or unpreventable causes beyond the employee’s control
• they are temporarily laid off, or laid off after having refused reasonable alternate work
• they are not provided with work as the result of a strike or lockout at the employee’s place of employment
• they are casual employees employed under an arrangement where they may choose to work or not
• they quit because of a reduction in wage rate, overtime rate, vacation pay, general holiday pay or termination pay

Constructive dismissal arises when an employer unilaterally does something so contrary to the employment relationship that the action forces the employee to quit. Changes to conditions of employment must be significant for constructive dismissal to apply. Examples include a significant reduction in wage rate or a significant change in work location, hours of work, or position.

When an employee quits due to constructive dismissal, they may be entitled to the termination pay they would have been owed if the employer ended their employment.

Employees should be aware that they must quit soon after a change in employment conditions for constructive dismissal to apply. Continuing to work under new employment conditions may be taken as acceptance of those conditions.

Employees who believe they are entitled to termination pay for constructive dismissal can make an employment standards complaint. Employees should be prepared to support their position of constructive dismissal.

Once resignation notice is given to the employer, the employer cannot reduce earnings or any other terms or conditions of employment. They cannot require an employee to use the following during the resignation notice period:

• banked overtime, unless otherwise agreed in writing
• vacation, unless the employer already informed the employee in writing to take their annual vacation prior to that employee giving notice
• general holidays when an employee has not taken the day off as a holiday

Employers who end their employee’s employment must give the employee, and ensure they receive, written termination notice.

Employers may give termination notice, termination pay or a combination of termination notice and termination pay. An employer must give written notice to their employee of at least:

Table 2. Employer notice period needed for length of employment

If an employee continues to work after the termination date provided, then the termination is no longer valid. The employee continues to be an employee until either the employee or employer provides a new termination notice.

To be valid, the employer’s termination notice must:

• be in writing and addressed to the employee concerned
• include a termination date, for the correct notice period in the table above.

Note: A termination notice is a legal document. You may need it if the employee sues for wrongful dismissal. Carefully consider the contents of your letter. 

Terminations letters normally are issued on company letterhead and contain:

• issue date and termination date
• employee’s full name and address
• a paragraph to advise the employee of the termination and effective date
• if applicable, a statement explaining the reasons for the termination that may include references to previous warning letters and a statement that due to lack of correction of identified issues, the employment has been terminated
• a paragraph to request the return of company property and how the employee will receive their final earnings, see deadlines for payment below for more information.

For a sample termination letter and more information, see the Employment standards tool kit for employers – Module 9: Termination of employment.

The employee’s length of service is the time that they have worked for the employer.

When an employee is rehired after a break of less than 90 days, their service is considered to be continuous. This means their original hiring date is used for calculating length of service.

If the employee took a job protected leave during the time they have worked for the employer, that time counts as being continuously employed for the purposes of calculating years of service.

Change of ownership

When a business changes ownership and the employee continues to work for the business, the employee retains all previous length of service. If they are terminated, the original hire date with the initial business is used for determining length of service.

Employers are not required to give termination notice (or termination pay) to employees who:

• are dismissed for just cause
• are employed for 90 days or less
• are employed in construction or brush clearing
• are employed on a seasonal basis and their employment ends on completion of the season
• are employed for a definite term or task for a period of 12 months or less
• are not provided with work as the result of a strike or lockout at their place of employment
• are casual employees who may elect to work or not for a temporary period when requested to by the employer
• refuse reasonable alternate work when temporarily laid off
• fail to return to work within 7 calendar days of a recall (unless provided otherwise in a collective agreement) when temporarily laid off
• are subject to a contract of employment that is or has become impossible to perform because of unforeseeable or unpreventable causes beyond the control of their employer

Once termination notice is given to the employee, the employer cannot reduce earnings or any other terms or conditions of employment. They cannot require an employee to use the following during termination notice period:

• banked overtime, unless otherwise agreed in writing
• vacation, unless the employer already informed the employee in writing to take their annual vacation prior to giving that employee termination notice
• general holidays when an employee has not taken the day off as a holiday

The employer may not wish to have their employee work out a notice period. In this case they may pay out the notice period. This is called termination pay. It is calculated by looking at the amount the employee would have earned had the employee worked through the required notice period.

An employer may combine notice (which the employee works out) and termination pay to make up the required notice period. For example, if an employee is owed 2 weeks of notice, the employer can ask them to work one week and pay out one week as termination pay.

Calculating termination pay

Termination pay must equal at least the wages the employee would have earned if the employee had worked regular hours for the termination notice period.

When the employee’s wages vary from one pay period to another, an average needs to be calculated. The average is taken over the last 13 weeks in which the employee worked before the termination date. This may not be consecutive calendar weeks – it is only the weeks that the employee worked.

The termination pay calculation only uses wages for regular hours worked by an employee. It does not include:

• overtime pay
• general holiday pay
• vacation pay
• other earnings that are not wages for regular hours worked

A terminated employee may be entitled to more than the minimum amount of termination notice or pay required under employment standards legislation. This is often referred to as severance pay. Severance pay is determined under common law and not required under the Employment Standards Code. Severance pay provisions are sometimes included in employment contracts.

To learn more about severance pay, employees may wish to seek legal counsel. For support in finding legal counsel, see the Law Society of Alberta Lawyer Directory or Pro Bono Law Alberta Legal Resources.

Termination for just cause typically involves conduct that is serious enough – either on its own account or in combination with other factors – to justify the employer ending the employment relationship.

This could include:

• misrepresentation of qualifications
• sexual harassment
• breach of duty
• conflict of interest
• competing with employer’s interest
• wilful disobedience
• theft
• fraud and dishonesty
• insolence and insubordination
• chronic absenteeism or lateness
• serious incompetence

Some situations are not just cause for termination, such as:

• temporary illness or disability
• personality conflict
• intoxication and substance abuse (in of itself, other reasons such as impaired performance, safety risks, behaviour issues or failing to meet company policies may be just cause)

See the employment standards tool kit for additional details on reasons for just cause termination.

In cases of just cause, no termination notice or termination pay are required.

Employers must be prepared to demonstrate that just cause exists for termination. In the case of an employee complaint, the burden of proof is on the employer to show that just cause exists.

The employer must prove that:

• the dismissal is justified:
  • The employer must show more than just dissatisfaction with the employee’s performance.
  • Real misconduct or incompetence must be demonstrated.
• the employee was aware of the consequences of failure to perform certain duties or obey certain rules

The employer must keep accurate records:

• It is a good practice to document the time, date and outcome of any conversations or encounters that they have with the employee about inappropriate behaviour or conduct.
• This information could be useful if they decide to end the employment relationship in the future.

The employer must ensure employees know the consequences of breaking the rules. They may do this by:

• developing an employee handbook and distributing it to all staff:
  • Include information on vacation and general holidays, overtime and disciplinary processes for misconduct.
  • Post a copy of this handbook in a public place for all staff.
• issuing warning letters if the employee’s conduct becomes problematic

See the employment standards tool kit for guidance on writing warning letters and more information.

If in doubt, call a lawyer. When dealing with termination for just cause, it is best to seek legal counsel prior to issuing a termination notice.

Employers cannot end the employment of or lay off an employee because that employee:

• is entitled to or has started maternity or parental leave
• is facing or might face garnishment action (a legal procedure where the court can authorize a creditor to take money owing to them from sources such as an employee’s pay cheque, an account at a financial institution, or money owed by others)
• has given or might give evidence at any inquiry or in any proceeding or prosecution under the Employment Standards Code
• has requested or demanded anything to which the employee is entitled under the Employment Standards Code
• has made or is about to make any statement or disclosure that may be required of the employee under the Employment Standards Code
• has started any job-protected leave, unless the employer suspends or discontinues the business – see the next section, When a business is suspended or discontinued, for more information

Employers cannot terminate an employee if termination would be a violation of human rights legislation. For more information, see the Alberta Human Rights Commission.

An employee on any leave can be dismissed or laid off if the employer suspends or discontinues the business in which the employee was employed.

However, if the business’ operations are resumed within 52 weeks of the end of the leave, the employer must reinstate the employee, or provide them with alternative work. In these cases, employees must be reinstated in accordance with an established seniority system or employer practice, and with no less than the same pay and benefits as before the leave started.

The employer must provide the employee with a notice of temporary layoff before the layoff starts. To be valid, the notice must:

• be in writing
• state that it’s a temporary layoff notice and its effective date
• include sections 62 to 64 of the Employment Standards Code

For guidance on writing a layoff notice, see the Employment standards tool kit for a sample temporary layoff notice.

If proper notice of temporary layoff is not given, the employee may have been unjustly or constructively dismissed. Some courts have also held that while the Employment Standards Code permits an employer to temporarily lay off an employee in the absence of a collective agreement or contract allowing layoff, the employee maintains the right to sue for constructive or wrongful dismissal if laid off in those circumstances.

In Alberta, the maximum duration of a temporary layoff is 90 days in a 120-day period. The employee is terminated on the 91st day if they have not resumed work. Termination pay must be paid if the employee is entitled.

The maximum days rule does not apply to school employees under the Education Act and school bus drivers if they work until the end of one school year and continue to work for, or have the opportunity to work for, the same employer at the beginning of the next school year.

The maximum days rule also does not apply if there is a collective agreement in place and it contains recall or termination rights following layoff. Employment ends when recall rights outlined in the collective agreement expire. Termination pay is owed, unless different rights are outlined in the collective agreement.

The period of temporary layoff can be extended if the employer makes regular payments to or on behalf of the employee, such as continuing to pay wages, employee pensions or benefits. The employee must agree to accept these payments in place of a firm limit of the length of the layoff. Termination pay is payable when payments cease.

To request that an employee return to work after a layoff, an employer must serve a recall notice to the employee. To be valid, the notice must:

• be in writing
• say that the employee must return to work within 7 calendar days from the date the notice was served to the employee

There are several ways to serve a recall notice to an employee. An employer can:

• give the notice to the employee in person, either at work or at the employee’s address
• leave the notice at the employee’s address with a person who appears to be 18 or older
• send the notice by mail or registered mail
• send the notice by fax or email

If the employee doesn’t return to work within 7 calendar days of being served the recall notice, the:

• employer can terminate employment
• employee would not be entitled to termination notice or termination pay

Employers undertaking a group termination must complete and submit a Notice to Minister of Group Terminations form.

Upon receiving it, Employment Standards will provide the employer with written acknowledgement of the notice.

For more information on group termination notices, contact Employment Standards:

Phone: 780-641-9824
Email: [email protected]

Support is available to employers planning closures or layoffs. As part of the group termination notice process, an overview of available provincial and federal services and programs will be provided. These services include working with employers and employees to develop presentations, workshops, referrals and other need-based responses.

Supports and services for employers include:

• Government of Canada Work-Sharing Program
• Thinking about Layoffs? What you need to know before letting people go

Supports and services for employees include:

• Alberta Supports
• How to Cope with Job Loss
• What to Do First After Job Loss