Structuring Severance Packages: Employee Discharge and Documentation Seminar


Presented at the Lorman Institute Employee Discharge and Documentation seminar on October 9, 2012

A costly mistake that employers frequently make, is failing to include a clear and enforceable termination provision in their employment contracts. This is due to a number of reasons. A key reason, is not wanting to consider details about how the relationship will end at a time when the relationship is just beginning. Another reason is thinking that the main terms of an employment agreement are limited to start date, position and duties and salary and benefits. Yet another reason is believing that the employment relationship is governed solely by employment standards legislation and that accordingly, the employer’s obligation is limited to satisfying Section 63 of the BC Employment Standards Act (the "ESA").

The law however, is that an employer who dismisses an employee without cause, must provide
the employee with reasonable notice or pay in lieu of such notice in accordance with the
common law (“Reasonable Notice”). The presumption that an employer must give Reasonable
Notice is rebutted if an employment contract contains a termination clause that clearly and
unambiguously specifies the notice to be given in the event the employer wishes to terminate the
relationship without cause.

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