April 24, 2013

Knowing when it’s time to let employees go is an important part of doing business.  Sometimes it can even be more important than making the right hiring choice in the first place.

Before hiring employees it is important to understand the legal entitlements employees have under the law.  For example, in British Columbia the Employment Standards Act (which is law created by the legislature) sets out the minimum amount of notice that must be given to a non-union employee prior to terminating their employment or, alternatively, the amount of severance you must pay them if such notice is not given.  For more information check out the Employment Standards Branch’s website at www.labour.gov.bc.ca/esb/.

Under common law (which is law made by the courts) non-union employees in British Columbia may be entitled to receive additional notice or severance if it would be reasonable to require it in the circumstances, unless the parties have agreed otherwise.  This is called the reasonable notice requirement, which is a requirement implied in every employment agreement (whether verbal or written) unless employer and employee expressly agree otherwise.  There is a lot of uncertainty about how much notice will be required by the courts in order to comply with this reasonable notice requirement.  As result, employers and employees often disagree at the time of termination.  A situation that is not good for either party and is best to avoid if possible.

In British Columbia, it is not possible to agree to a notice/severance entitlement that is less than the minimum amount required under the Employment Standards Act.  Any attempt to do so could render the agreement illegal and void.  However, it is possible, and often advisable for employers, to agree that the reasonable notice requirement will not apply and to agree on some other amount of notice/severance that an employee will be entitled to receive (so long as it is not less than the minimum required under the Employment Standards Act).  Doing so will make it very clear to employers how much notice or severance they have to give prior to terminating an employee which will make it easier and less risky.

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