Common Law Reasonable Notice for Termination
Written by Alec Colwell, JD Candidate 2025 | UCalgary Law
When an employer terminates an employee without cause, the employee is generally entitled to notice of the termination, or pay in lieu of notice.[1] In Alberta, the minimum notice period an employee is entitled to is set out in the Employment Standards Code.[2] These minimums range from one week of notice for employees with more than 90 days but less than two years of service, up to eight weeks of notice for employees with 10 or more years of service.[3] However, these are only the statutory minimums, and an employee's common law entitlement to notice is often significantly greater.[4]
In the absence of an enforceable termination clause in an employment contract, an employee is entitled to "reasonable notice" at common law. The leading case on determining what constitutes reasonable notice is Bardal v Globe & Mail Ltd, which sets out a non-exhaustive list of factors to be considered.[5] These factors include the character of the employment, the length of service of the employee, the age of the employee, and the availability of similar employment, having regard to the experience, training, and qualifications of the employee.[6] There is no fixed mathematical formula for calculating reasonable notice, and courts have discretion to weigh these factors based on the specific circumstances of each case.[7]
Employers can attempt to limit an employee's entitlement to reasonable notice by including a termination clause in the employment contract that specifies a fixed notice period, often tied to the statutory minimums. However, courts have consistently held that these clauses will only be enforceable if they comply strictly with the Employment Standards Code. In Machtinger v HOJ Industries Ltd, the Supreme Court of Canada held that if a termination clause purports to contract out of the minimum standards set by employment standards legislation, the clause is void, and the employee will be entitled to reasonable notice at common law instead of the amount specified in the contract.[8] The Court reasoned that this approach incentivizes employers to draft contracts that comply with the legislation.[9]
More recently, courts have continued to scrutinize termination clauses closely for compliance with employment standards legislation. In McKercher v Stantec Consulting Ltd, the Saskatchewan Court of Queen's Bench considered a termination clause and reaffirmed the principle that any ambiguity in a termination clause, or any failure to comply with minimum statutory requirements, will render the clause unenforceable.[10] This means that even a seemingly minor drafting error can result in an employee being entitled to common law reasonable notice, which is often substantially longer than the minimum notice period set out in the termination clause.[11] Given the potential financial exposure associated with a defective termination clause, employers should ensure that their employment contracts are carefully drafted and reviewed to ensure enforceability.[12]
Endnotes
[1] Bryce Tingle, Start-Up and Growth Companies in Canada: A Guide to Legal and Business Practice, 3rd ed (Toronto: Thomson Reuters, 2018).
[2] Employment Standards Code, RSA 2000, c E-9.
[3] Ibid at s 56.
[4] Ibid at s 57.
[5] Bardal v Globe & Mail Ltd, [1960] OJ No 149 (ONSC).
[6] Ibid at para 21.
[7] Ibid.
[8] Machtinger v HOJ Industries Ltd, [1992] SCJ No 41, [1992] 1 SCR 986 at 508 (SCC).
[9] Ibid.
[10] McKercher v Stantec Consulting Ltd, [2019] SCJ No 159, 2019 SKQB 100.
[11] Ibid.
[12] Ibid.
