Is an Employee Entitled to their Benefits during the Notice Period?

After a termination notice has been received, employees are often confused as to their rights under the Employment Standards Code, RSA 2000, c E-9 (the “Code”).  There is strong commentary on pay during the notice period but there seems to be a lack of clarification on the benefits an employee is entitled to.

The Code does not explicitly state how benefits are managed during the notice period; however, there are clear provisions on the enforceability of the employment contract as a whole.

What is a Notice Period?

A notice period is the time period between the notice of termination and the actual termination of employment. Where an employee has been employed for three months or more, the employee can only be terminated by a termination notice (working notice), termination pay (pay in lieu of notice), or some combination of both that is equivalent to the wages and benefits of the total notice period the employee is entitled to.

The length of notice that an employee is entitled to is dependent upon the period of the employee’s employment. The Code sets out the following requirements for notice periods:

(a) one week, if the employee has been employed by the employer for more than 90 days but less than 2 years,

(b) 2 weeks, if the employee has been employed by the employer for 2 years or more but less than 4 years,

(c) 4 weeks, if the employee has been employed by the employer for 4 years or more but less than 6 years,

(d) 5 weeks, if the employee has been employed by the employer for 6 years or more but less than 8 years,

(e) 6 weeks, if the employee has been employed by the employer for 8 years or more but less than 10 years, or

(f) 8 weeks, if the employee has been employed by the employer for 10 years or more.

Despite these requirements, often times employees are entitled to greater notice periods under the common law. Whereas the Code relies on the time of employment, the common law looks to a number of additional factors. The Ontario High Court, as it was known at the time, in Bardal v Globe & Mail Ltd., 1960 CanLII 294 ONSC set out the following list of factors to determine the applicable reasonable notice period:

  1. the character of the employment;
  2. the length of employment;
  3. the age of the employee; and
  4. the availability of similar employment considering the employee’s experience, training and qualifications.

By applying these factors to each specific situation, the notice period an employee is entitled to may increase or decrease.

What Benefits are you entitled to?

According to the Code, neither wages nor any other term and condition of employment may be reduced by an employer between the time the termination notice is given and the date employment is actually terminated. As an employee, you are entitled to all the benefits within your employment contract during this period.

A termination notice does not constitute the immediate termination of an employment contract; the employment contract is not terminated until the end of the notice period.  

Many times employers opt to pay the employee money in lieu of notice. In this case, the employer pays the employee the full amount of wages the employee is entitled to during the notice period without requiring the employee to work.

Regardless of whether the employee is required to work during the notice period, the employee is still entitled to benefits until the end of the notice period. Employers also often insert clauses in employment contracts to contract out of the employment standards set out in the Code. However, doing so will render such clauses void and unenforceable unless a greater substitute is provided for the employee.

 As an employee, you are entitled to the benefits and wages for the continuation of the notice period.

Please contact Osuji & Smith for further inquiries.