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THE QUESTION
My wife has worked as a middle manager for a company for 36 years. She was verbally informed that she would have to fire 10 of her team members and that her position would subsequently be terminated in September. She was told that she would receive 70 weeks’ severance. She asked for something in writing but never received it.
A while later, they told her (again, verbally) that they would like to keep her until next March. Again, she asked for something in writing. But nothing. They eventually sent her an email saying she could work part-time until March, and then she would get 30 weeks’ severance. She refused that offer.
I understand that, unlike Ontario and Alberta, there’s no law in New Brunswick covering severance pay. So, where do we stand?
THE FIRST ANSWER
Brenda Comeau and Sue Duguay, labour and employment lawyers, Pink Larkin, Fredericton
Employers can terminate employees without giving a reason, but they must provide “reasonable notice” or “pay in lieu”. If your wife does not have a written employment contract that limits her entitlements to the minimum standards under the New Brunswick Employment Standards Act (ESA), her rights may be governed by common law, which is more generous. Under the ESA, employees with five or more years of service are entitled to four weeks’ written notice. However, as a general guideline, employees may receive about one month of notice for each year of service under common law, though this can vary based on factors such as age, job role and the availability of similar employment.
It is also important to know that a working notice period (where the employee continues working after being told of termination) can reduce the amount of reasonable notice owed. However, the way your wife’s employer has handled the termination complicates matters. Initially, they told her she’d be let go in September with 70 weeks of severance. Then they extended her employment to March and later offered part-time work with only 30 weeks of severance. Most of this was communicated verbally. Courts have found that unclear or shifting termination plans can invalidate working notice and support a claim for full common law notice.
Your wife’s case could even potentially be one of wrongful or constructive dismissal, based on unilateral changes to her working conditions. That said, the full picture matters. Connecting with an employment lawyer is the best way for your wife to understand her rights and explore the options available to her.
THE SECOND ANSWER
Scott Dallen, associate, Ascent Employment Law Corp., Vancouver
New Brunswick legislation guarantees just four weeks of pay in these circumstances – but that’s just the starting point. Your wife’s case is a perfect example of the potentially significant differences between statutory minimum payments and an employee’s full legal entitlements.
First of all, her position is strengthened by the fact that her employer made two procedural errors during the termination:
- Written notice: All Canadian jurisdictions require employers to provide written notice of termination that clearly ends the relationship on a specific date. Oral or ambiguous notice is not sufficient.
- No obligation to accept lesser role: In most cases, there is no requirement for a full-time employee to accept part-time work or any other diminished position. However, if a comparable role is offered, an employee may risk losing their severance entitlement by refusing it.
New Brunswick’s Employment Standards Act differs from other provinces in that it promises just four weeks of notice to any employee with five or more years of service. However, what remains consistent across Canada is that the statutory amount is only a minimum entitlement. Unless your wife’s contract contains specific language limiting her entitlements, she can pursue a longer period called common law reasonable notice.
The length of this notice period depends on factors including your wife’s age, length of service, position type and the availability of similar employment. While notice periods vary widely, a general rule of thumb is one month per year of service, with the maximum notice period typically capped at 24 months.
As you can imagine, many employers will resist providing high severance payments. I encourage your wife to consult with an employment lawyer who can help secure the 70 weeks promised to her, and potentially more.
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