Termination and termination pay | fact sheet

Termination and termination pay | fact sheet

When an employee quits a job or when an employer terminates the employment of an employee, proper notice must be given.

Check back for updates – new employment standards will come into effect on January 1, 2018. Read about the changes.

Basic rules

The Employment Standards Code covers rules for when employment is ended, entitlements to termination notice and pay, temporary layoff, and recall rights.

In general:

  • both employees and employers must give each other notice of their intention to end the employment
  • an employer may end the employment of an employee by giving them:
    • termination notice,
    • termination pay, or
    • a combination of termination notice and termination pay
  • if the period of employment is 3 months or less, no notice is required from either party
  • notice period length is based on how long the employee has been working for the employer
  • when proper notice is given, the employee’s earnings must be paid within 3 days after their last day of employment
  • neither earnings nor other terms or conditions of employment may be reduced during the notice period

Deadline of payments for amounts owed

When proper termination notice is given

Whether the employee quits or the employer terminates their employment, when proper notice is given the employee’s earnings must be paid within 3 consecutive days after their last day of employment. Earnings include all wages, overtime pay, vacation pay, general holiday pay and termination pay owed.

When proper termination notice is not given

If the employee fails to give the required notice before ending their employment, the employer must pay the employee within 10 days after the date on which the notice would have expired.

When termination notice and termination pay are not required

If an employer or employee ends employment and no termination notice or termination pay is required, earnings must be paid within 10 days after the last day of employment.

When the rules are not followed

Employees or employers who feel employment standard rules around termination have not been followed can file an Employment Standards complaint.

More details

Show Answer When an employee quits

Termination notice

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

Notice period Length of employment
1 week more than 3 months but less than 2 years
2 weeks 2 years or more

When notice is not required

Employees aren’t required to give termination notice if:

  • they’ve been employed for 3 months or less
  • there’s a different established custom or practice in an industry respecting terms of employment
  • continuing to be employed by the employer 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’re temporarily laid off, or laid off after having refused reasonable alternate work
  • they’re not provided with work as the result of a strike or lockout at the employee’s place of employment
  • they’re casual employees employed under an arrangement where they may choose to work or not when asked to do so
  • they quit because of a reduction in wage rate, overtime rate, vacation pay, general holiday pay or termination pay

Contents of the termination notice

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

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

When notice is no longer valid

A termination notice is null and void if the employee continues to be employed by the same employer after the date specified for termination of employment.

Construction workers

Construction employees aren’t entitled to termination notice or termination pay from their employer. Likewise, construction employees aren’t required to give their employer termination notice. See special rules for construction workers.

Show Answer When an employer terminates the employment of an employee

Employers may give termination notice, termination pay or a combination of termination notice and termination pay.

Termination notice

Employers who end their employee’s employment must give the employee written termination notice. The employer is responsible for ensuring the employee receives their notice.

An employer must give written notice to their employee of at least:

Notice period Length of employment

1 week

more than 3 months but less than 2 years

2 weeks

2 years but less than 4 years

4 weeks

4 years but less than 6 years

5 weeks

6 years but less than 8 years

6 weeks

8 years but less than 10 years

8 weeks

10 years or more

When notice is no longer valid

A termination notice is null and void if the employee continues to be employed by the same employer after the date specified for termination of employment.

Determining length of service

The employee’s length of service is the time that they’ve worked for the employer. It can include more than one period of employment, if the breaks between periods are not longer than 3 months.

When a business changes ownership

If a business, or any part of it, is bought, sold, leased or transferred and the employee continues to work for the business, the employee retains all previous length of service. In this case they’d be entitled to a notice of termination based on their full length of service. The original hire date with the initial business would be used for determining termination pay.

When termination notice isn’t required

Employers aren’t required to give termination notice (or pay in lieu) to employees who are:

  • dismissed for just cause
  • employed on a seasonal basis and their employment ends on completion of the season
  • employed for 3 months or less
  • employed for a definite term or task for a period of 12 months or less
  • not provided with work as the result of a strike or lockout at their place of employment
  • 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 consecutive days of a recall (unless provided otherwise in a collective agreement) when temporarily laid off
  • 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
  • employed on-site in the construction industry
  • employed in the cutting, removal, burning or other disposal of trees and brush or either of them for the primary purpose of clearing land

Although the Code doesn’t require termination notice for some employees, these employees may be entitled to notice under common law.

Contents of the termination notice

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

  • be in writing and addressed to the employee concerned
  • include a termination date

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. See sample notice below.

Sample Termination Letter

(on company letterhead)

Date:

Employee address:

Dear employee:

Paragraph 1:

Advise the employee that their employment will be terminated, and the effective date.

Paragraph 2:

  • if applicable, include a statement explaining that the reasons for termination were outlined in previous warning letters
  • state that, because the employee hasn’t corrected these issues, their employment will be terminated

Paragraph 3:

  • request the return of any company, property, etc.
  • state when the employee will receive their final earnings (in the case of just cause, the Code outlines that they must be paid within 10 calendar days of their last day worked)

Sincerely,

Supervisor/manager name

Title

Termination pay (pay in lieu)

The employer may not wish to have their employee work out a notice period. In this case they may give the employee pay in lieu in the amount the employee would have earned had the employee worked through the required notice period.

Combined notice and pay

An employer may combine notice (which the employee works out) and pay in lieu of notice to make up the required notice period.

Calculating termination pay

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

When the employee’s wages vary from one pay period to another, the weekly average of the employee’s regular wages for the 3-month period (13 weeks) immediately preceding the date of termination is used to determine the employee’s termination pay.

When an employer cannot terminate the employment of an employee

Generally, an employer has the right to end the employment of an employee at any time, as long as they provide the required length of notice or pay in lieu.

The major exception is where the dismissal is in violation of human rights legislation. For more information, see the Alberta Human Rights Commission.

Employment situations that can’t be terminated

It’s also considered a violation to end the employment or lay off of an employee who:

  • is entitled to or has started maternity or parental leave
  • is entitled to or has started reservist leave
  • is entitled to or has started compassionate care leave
  • is facing or might face garnishment action
  • has given or might give evidence at any inquiry or in any proceeding or prosecution under the Code
  • has requested or demanded anything to which the employee is entitled under the Code
  • has made or is about to make any statement or disclosure that may be required of the employee under the Code

When a business is suspended or discontinued

An employee on maternity, parental, reservist or compassionate care 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, 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.

Discrimination against the employee

An employer may not end the employment of, lay off, or discriminate against an employee for exercising their rights – or complying with certain obligations – under the Code.

For example, an employee cannot be discriminated against for:

  • making a complaint
  • giving or having the potential to give evidence at any inquiry or in any proceeding or prosecution
  • requesting or demanding anything to which they’re entitled
  • making or being about to make any statement or disclosure that may be required

Just cause for terminating employment

An employer is not required to provide notice when just cause exists for dismissing an employee.

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

What’s important to know

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

Employer’s responsibilities

  1. 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
  2. The employer must keep accurate records:
    • it’s 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
  3. 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, as well as disciplinary measures 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

Temporary layoff

Under the Code, an employer who wishes to maintain the employment relationship may temporarily lay off an employee.

Notice of temporary layoff

The employer must give the employee notice of temporary layoff. To be valid, the notice must:

  • be in writing
  • state that it’s a temporary layoff notice and its effective date
  • include sections 62, 63 and 64 of the Code

If these conditions are not met, the employee may have been unjustly or constructively dismissed. Some courts have also held that while the 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.

Length of temporary layoff

In Alberta, the maximum duration of a temporary layoff is 59 days.

On the 60th consecutive day of a temporary layoff, the employee’s employment is considered to be ended, and the employer must pay termination pay.

The period of temporary layoff can be extended beyond 59 days if the employer makes regular payment to or on behalf of the employee, such as continuing to pay wages, employee pensions or benefits.

Termination pay is payable when benefits cease.

Recall of employee during temporary layoff

If a collective agreement contains recall rights following lay off, the employment ends and termination pay is owed when recall rights expire.

School employees and school bus drivers

The 59-day rule does not apply to school employees and school bus drivers if they work until the end of one school year and continue to work, or have the opportunity to work for, the same employer at the beginning of the next school year.

Group termination

If an employer intends to terminate the employment of 50 or more employees at a single location within a 4-week period, the employer must give the Minister of Labour 4 weeks’ written notice of intention to do so.

The notice must specify the number of employees whose employment will be terminated, and the effective date of the terminations.

Exceptions to this rule

This requirement does not apply to seasonal laborers or to anyone employed for a definite term or task.
How to give notice

Employers subject to the group termination requirement must complete and submit this form:

Notice to Minister of Group Terminations form (PDF, 202 KB)

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

Show Answer Self-assessment tool

Does your workplace comply with Alberta’s employment standards laws for termination? Use this online questionnaire to see if your business practices comply.

How the law applies

Part 2, Division 8 of the Employment Standards Code (Code) provides the process required to terminate employment relationships, entitlements to termination notice and pay, temporary layoff and recall rights.

Division 8 also outlines circumstances in which an employer or an employee may not be required to provide termination notice under the Code.

Disclaimer: In the event of any discrepancy between this information and Alberta Employment Standards legislation, the legislation is considered correct.

Created:
Modified: 2017-08-23
PID: 1474

Contact Employment Standards

Call Employment Standards for information, or Ask a question online.

  • 780-427-3731 (Edmonton)
  • 1-877-427-3731 (toll-free)

View more contact options