Common Law Reasonable Notice for Termination

Written by Alec Colwell
JD Candidate 2025 | UCalgary Law

Termination is a common occurrence in start-up businesses. Employees don’t always work out as anticipated at the time of hire – this is even more true in a start-up where roles are typically less defined, highly dynamic, and lacking in established procedures.[1] The government and the courts have recognized that it would significantly disrupt employees' lives if they could be suddenly terminated with no time to seek replacement employment. To mitigate this problem, the mandatory minimums for reasonable notice were established. The Employment Standards Code[2] [the “Code”] outlines the mandatory minimum notice periods.
 
The Code provides for a range of minimum notice periods depending on the employee’s length of service. In Alberta, this range begins at one week of notice for an employee who has been employed between three months to two years and increases to eight weeks of notice for an employee who has been employed for ten years or more.[3] Alternatively, an employer may opt to pay the employee a lump sum equal to their regular salary during the termination notice period without allowing them to continue working during that period.[4] This is known as severance pay.
 
Common law factors, outlined in Bardal v Globe & Mail Ltd., [5] can entitle employees to more substantial severance compensation that is known as reasonable notice. The Bardal factors account for the likelihood that an employee can acquire similar work and include 1) the character of the employment, 2) the length of service, 3) the age of the employee, and 4) the availability of similar employment.[6] This common law determination of reasonable notice is the default position unless the employee is terminated with cause or the employment agreement contains a termination clause to limit the notice period.[7]
 
If you can contract for the mandatory minimum notice period in a termination clause of an employment contract, then why concern yourself with the common law factors for determining reasonable notice? One reason is that a termination clause will not always stand up in court. In Machtinger v HOJ,[8]  the employer’s contracted below the statutory minimum. As a result, the court held that the entire termination provision was void and the common law factors for determining reasonable notice would apply.[9] In McKercher v Stantec,[10] the court severed the termination provision of the employment contract when they found that the terms of the contract no longer reflected the objective reality of the plaintiff’s employment. The plaintiff had worked his way up in seniority over several years with no alterations made to his original contract.[11] The court again defaulted to the common law to determine reasonable notice.[12]
 
To limit the amount of severance that an employer will have to pay, the best course of action is to seek legal help in drafting an unambiguous employment contract with a legal termination clause. Additionally, having employees sign updated employment contracts when significant terms of their contract change will alleviate issues regarding the enforceability of a termination clause. If an employment contract does not contain a termination provision, being aware of how the Bardal factors affect the determination of reasonable notice will assist an employer in negotiating fair severance.
 
 
 
 
 


[1] Bryce Tingle, Start-Up and Growth Companies in Canada: A Guide to Legal and Business Practice, 3rd ed (LexisNexis Canada Inc, 2018) at pp 127-130.

[2] Alberta Employment Standards Code, RSA 2000, c E-9 [Code].

[3] Ibid at s 56.

[4] Ibid at s 57.

[5] [1960] OJ No 149 (ONSC).

[6] Ibid at para 21.

[7] Ibid.

[8] [1992] SCJ No. 41, [1992] 1 SCR 986, at 508 (SCC).

[9] Ibid.

[10][2019] SCJ No. 159, 2019 SKQB 100.

[11] Ibid.

[12] Ibid.