Termination of employment is one of the most litigated areas of employment law. One of the most common questions that arises when an employee is dismissed is: how much notice are they entitled to receive? Our Calgary Employment Lawyers have significant experience in trial of such matters, and the answer is rarely simple as it depends on the interaction between statutory minimums, the terms of the employment contract, and common law principles of reasonable notice.
In general, if the employment contract specifically limits notice to the statutory minimum and excludes common law reasonable notice, the employee is limited to the statutory minimum under Alberta’s Employment Standards Code. Employers can limit an employee’s entitlement to reasonable notice by using a well-drafted termination clause in the employment contract. Courts will enforce such clauses if they are clear, unambiguous, and compliant with employment standards legislation.
If there are no clearly drafted termination provisions within the employment contract, the employee will be entitled to common law reasonable notice. The length of statutory notice depends on the employee’s length of service, with a maximum of eight weeks’ notice for employees with ten or more years of service.
But what happens when an employee is terminated for cause, or when the termination is disputed because of alleged misconduct, policy breaches, or constructive dismissal? The recent decision in Yee v. WestJet sheds light on these issues.
Yee v. WestJet: Wrongful Termination for Cause
In Yee v. WestJet, the plaintiff was terminated for cause for failing to comply with WestJet’s mandatory COVID-19 vaccination policy. The employer argued that refusal to comply with the policy amounted to just cause for dismissal, thereby disentitling the employee to notice or severance.
The Alberta Court of King’s Bench ultimately found that WestJet’s vaccine policy was reasonable, but its application to this particular employee was not justified in the circumstances. As a result, the court held that WestJet did not have just cause for termination.
This finding opened the door for the employee to claim damages for wrongful dismissal. Importantly, WestJet argued that even if just cause was not proven, the employee’s entitlement to notice should be limited to the statutory minimum set out in the employment contract.
The Court disagreed. It held that because the employee was not terminated without cause, the contractual clause limiting notice in the event of a without-cause termination was not triggered. As a result, the employee became entitled to common law reasonable notice, which was significantly greater than the statutory minimum.
This decision is significant. It confirms that where an employer alleges cause but fails to prove it, they may lose the benefit of contractual notice limitations and be exposed to greater liability.
Constructive Dismissal: When the Employee "Terminates" the Employment
The reasoning in Yee also has important implications for constructive dismissal cases. Constructive dismissal occurs when an employer fundamentally alters the terms of the employment contract, or creates a toxic or intolerable work environment, such that a reasonable person would conclude the employment relationship has been repudiated.
Examples include:
- Reducing an employee’s salary or benefits
- Demoting the employee or changing job responsibilities without consent
- Transferring the employee to a distant location
- Failing to provide a safe or respectful workplace
When constructive dismissal is proven, the law treats it as a wrongful termination, and the employee becomes entitled to damages in lieu of notice, often at common law rather than under the strict wording of the contract. Our Calgary Employment lawyers regularly advise employees on such matters and conduct litigation on constructive dismissal claims.
The Ontario decision in Humphrey v. Mene Inc., [2021] O.J. No. 2476, which was cited with approval in Yee, provides guidance. The Court explained that employees agree to the terms of an employment contract with an implied expectation of good faith and fair dealing by the employer. Where the employer significantly departs from those expectations — for example, by breaching its duty of good faith — the employer may lose the right to rely on contractual provisions that limit notice entitlements.
In other words, if the employer is the party in breach, they cannot turn around and use the contract to limit their liability.
Implications for Employers
The decisions in Yee and Humphrey reinforce several important lessons for employers:
Avoid Constructive Dismissal Pitfalls
Employers should not unilaterally change fundamental terms of employment without the employee’s consent. If operational changes are necessary, they should be implemented with notice, consultation, or fresh consideration to avoid allegations of constructive dismissal.
Exercise Caution Before Terminating for Cause
Cause is often called the “capital punishment” of employment law. It is a very high standard to meet, and courts will scrutinize whether termination was a proportionate response to the employee’s conduct. Employers who allege cause but cannot prove it risk paying substantial common law damages.
Draft Clear, Enforceable Termination Clauses
Employers should ensure that their employment contracts clearly distinguish between with-cause and without-cause terminations and comply with minimum employment standards. Ambiguous or poorly drafted clauses will be interpreted against the employer.
Apply Policies Consistently and Fairly
Even a reasonable policy may be unenforceable if applied unfairly or inconsistently. Employers should document decisions, consider accommodation obligations, and seek legal advice before termination.
Implications for Employees
For employees, Yee and related cases are a reminder that:
You should seek legal advice promptly, as limitation periods apply, and delay could affect your rights..
You may be entitled to more than statutory minimums, even if your contract says otherwise, if you were wrongfully dismissed or constructively dismissed.
Conclusion
The decision in Yee v. WestJet illustrates how courts are prepared to look beyond the four corners of the employment contract when the employer’s conduct has undermined the employment relationship. When constructive dismissal is established, contractual clauses limiting notice periods may no longer protect the employer.
For employers, this highlights the importance of careful drafting, consistent policy application, and good-faith treatment of employees throughout the employment relationship. For employees, it reinforces that the law provides robust protections against wrongful and constructive dismissal, and that contractual notice limitations are not always the final word.
If you have been wrongfully terminated or have an employee who you wish to terminate for cause, contact our Calgary Employment Lawyers at OP Lawyers to discuss your legal options.
Disclaimer: This blog post is intended for informational purposes only and does not constitute legal advice. For advice specific to your circumstances, please consult a qualified lawyer at OP Lawyers LLP or another legal professional