In Alberta, employers have the option to provide employees with pay in lieu of notice upon termination. The rules on how to do this correctly are set out in the Employment Standards Code (ESC), which determines the minimum employment standards for provincially regulated businesses in Alberta. Providing employees with the correct entitlements is crucial to staying compliant with legislation. Here’s what employers should know about pay in lieu of notice, notice periods and termination pay.
Termination
If an employer wants to terminate an employee, they must provide them with termination notice, termination pay or a combination of both. This obligation does not apply if the employee has been employed less than three months or is being dismissed for just cause.
Pay in Lieu of Notice
In situations where employers do not want employees to work through their notice period, employers can provide termination pay instead of notice. In this case, the employee stops coming into work and instead receives compensation for the wages they would have earned had they continued working until their termination date.
Employers can also provide a combination of notice and termination pay. Employees can work partway through their notice period and receive termination pay for the remaining period that they do not work.
Calculating Termination Pay
An employee’s termination pay in lieu of notice must equal the amount of wages they would have earned had they continued regular work during their notice period. The length of the termination notice period depends on how long the employee has worked for their employer.
This is the minimum requirement for termination pay as specified in the ESC. However, under Common Law employees may be eligible for more notice or pay.
Need advice on how much termination notice to give an employee?
Based on circumstances, certain employees are not entitled to termination notice while others may be eligible for more than is legally required. Speak to one of our HR advisors to find out how much notice your employee is due. Contact us today for help with all types of employee pay, termination and pay in lieu of notice: 1 (833) 247-3652.
