Employee Termination in Alberta: Everything Employers Need to Know

Employee termination is one of the most difficult parts of running a business, but sometimes it’s necessary. Employers in Alberta must understand and fully comply with the Employment Standards Code (the “Code”) to ensure they are terminating employment in accordance with the law.

Employers who terminate employees without cause in Alberta are obligated to provide sufficient notice of termination or payment in lieu of notice. This blog explains what termination with and without cause looks like in Alberta and how employers can ensure they handle these terminations correctly and in compliance with legislation. Doing so will help protect your business from wrongful dismissal claims.

What are the two types of terminations of employment in Alberta?

In Alberta, as in the rest of Canada, there are two ways that an employer can terminate employment:

• “With cause”: used in instances when there is serious workplace misconduct, and
• “Without cause”: used when your employer terminates you for any other reason.

Employment contracts must have termination clauses that are clearly worded, enforceable, and set out termination pay. Termination clauses are generally enforceable so long as they are compliant with the Alberta Code and other rules, such as the Alberta Human Rights Act.

What is considered just cause for termination in Alberta?

If you dismiss an employee for just cause, you are not required to provide notice or pay in lieu of notice. Termination for just cause typically involves conduct that is serious enough to justify ending the employment relationship. Some examples of termination of just cause may include theft, fraud, sexual harassment, and damaging the company’s reputation.

What is considered termination without cause in Alberta?

Unlike terminating an employee for just cause, termination without cause is when an employer terminates an employee for any reason other than serious misconduct. This is often due to a company restructuring, or because the company no longer requires an employee to do their job. When done properly, termination without cause is lawful in Alberta, and an employee will be entitled to notice or pay in lieu of working during the notice period.

Is termination pay mandatory in Alberta?

Employers are required to pay employees termination pay if they are terminated without cause, in accordance with the ESC. When calculating termination pay, employers must ensure that the termination pay is equal to the wages the employee would have made while serving their termination period.  

Employers are also free to offer a combination of the termination notice and pay in-lieu of notice.

What qualifies as wrongful dismissal in Alberta?

Wrongful dismissal is the term given to any employment termination that is not conducted lawfully. This applies when the employee is dismissed without proper notice or pay in lieu of notice or if the employer dismisses the employee for cause but does not have just cause. In this instance, the employee may be entitled to a termination package that covers all pay and benefits the employee would have earned if the employer had been given the required notice.

How long do you have to pay out employees after termination in Alberta?

When an employee is terminated, employers are required to pay the employee within 10 consecutive days after the end of the pay period in which termination occurred, or 31 consecutive days after the last day of employment.

When does an employer not have to give a termination notice or severance package in Alberta?

While employers are required to give notice of termination or pay in lieu of notice in the majority of employment situations in Alberta, there are a few exceptions. Some of these include:

• If an employee is terminated for just cause (e.g. theft).
• If the employee has been employed for less than 90 days.
• If their employment was seasonal, or for only a set period of time.
• If they are an independent contractor.
• If their employment contract is impossible to perform due to unforeseeable or unpreventable causes beyond their control.
• If the layoff is only temporary.
• If they refused reasonable alternative work.
• If the layoff is the result of a strike or lockout as a result of collective bargaining.

What is the notice period for termination of employment in Alberta?

An employer can terminate an employee for without cause no matter the length of the employment. The employer may be required to give the employee notice or pay in lieu of notice, depending on the employee’s length of employment.

Employers can terminate an employee without notice if the employee has worked for them for less than 90 days. Once an employee has continuously worked for you for three months, they are entitled to notice of termination or pay in lieu of notice. The amount of notice depends on an employee’s length of employment.

The minimum termination notice requirements under the Alberta ESC are:

More than 90 days but less than 2 years – 1 week’s notice

2 years but less than 4 years - 2 weeks’ notice     

4 years but less than 6 years: 4 weeks’ notice      

6 years but less than 8 years: 5 weeks’ notice      

8 years but less than 10 years: 6 weeks’ notice    

10 years or more: 8 weeks’ notice

How do I approach terminating employees during the holidays?

The holiday season is a time for celebration, reconnection, and relaxation with loved ones. It’s also a time when expenses are at their highest and hiring is at its lowest, making it an unfavourable time of year to terminate employees. Unfortunately, it’s still not unheard of, though, with tech giant Meta recently announcing it was laying off 11,000 employees.

While terminating employees during the holiday season should be avoided, there are certain steps you can take as an employer to handle this sensitive issue as humanely as possible. Firstly, give employees as much notice as possible so they have time to plan ahead.

Also, either consider allowing employees to work through their notice period or receive pay in lieu of notice. Conduct the termination in person rather than virtually, offer support such as benefit continuation and provide a positive reference for their next position if the employment ended on good terms. Lastly, be mindful of your social media presence and avoid any posts which may include gifts or spending.

Best practices for terminating employees

To protect your business, here are a couple of things employers should keep in mind when terminating an employee in  Alberta:

1. Be clear and concise: The termination meeting should be brief and should clearly cover what is necessary. You might outline the reasons for termination, especially in cases of termination for just cause. Moreover, you should reference the chances the employee was given to correct any behaviour or other issues.
2. Have a witness: Have a member of HR or management present in the meeting as a witness. Taking notes and documenting the meeting will help you protect your business.

Do you need help calculating termination pay correctly?

Our experts can help you develop company policies as well as with any other HR, health and safety, or employment advice you need. See how we have helped other small and medium businesses get their business compliant with provincial legislation. Contact our HR specialists to get more tips and advice on best practices for compliant employee terminations in Alberta: 1 (833) 247-3652