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Termination Clause in Alberta: What Employees Need to Know

Getting a new job can be an exciting and sometimes overwhelming time. Many new employees simply sign on the dotted line and are ready to jump in. However, many employment agreements contain language which can be quite limiting on an employee’s rights, such as strict termination clauses, non-compete, or non-solicitation clauses.

Related article: Have you been Temporarily Laid Off in Alberta? Find out what your legal rights are.

The Importance of the Termination Clause

Termination clauses are often overlooked by employees when signing a new contract, as contemplating the end of the employment relationship seems silly when the ink on the new contract is barely dry. However, these clauses have the potential to significantly limit severance entitlements upon termination, and employees should have a good understanding of what this means for them before signing.

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In Alberta, an employer cannot contract out of the minimum amount of termination notice (or pay in lieu of notice) that is owed to an employee under the Alberta Employment Standards Code. However, a well-drafted termination clause can contract out of, or severely limit, the employer’s obligation to provide further notice or pay in lieu of notice (severance pay) pursuant to the common law (court cases).

Many termination clauses are poorly drafted and are generally unenforceable. However, a well-crafted termination clause may be successful in limiting an employee to the minimum termination notice under the Code, and nothing more. This means that the employee would be entitled to significantly less than what would be awarded by a court. The employee would also be barred from bringing a wrongful dismissal claim against the employer for further severance.

Read our full list of Legal Resources for Employees

Peace of Mind

Having your employment agreement reviewed by a Lawyer before signing, can provide peace of mind, and help prevent any nasty surprises down the line. A lawyer can help you understand any potential risks or impacts arising from the language in the contract, and can also negotiate more favourable terms on your behalf, such as a more generous severance entitlement, or a shorter non-compete/non-solicit period.

Contact a Calgary Employment Lawyer today or 403-723-0175 to get started.

3 Responses

  1. glen kohlsmith

    I am seeking severance pay for 12 years service as a journeyman millwright
    company issued a check for $ dollars which covered vacation pay and termination notification
    stillwant my severance payment for 12 years
    Old Dutch Foods is a multimillion dollar company and I could use that severance payment
    Im 72 years old and been in my trade since 1982
    right now living on EI every two weeks plus cpp and old age

  2. glen kohlsmith

    i belong to 401 ufcw union
    the union says I can not collect severance pay because of a last chance agreement i had to sign without compensation of wages before when i claimed sleep apnea
    I was reinstated my job and no wages back pay
    then close to 1 year later I was monitoring waste water system on shop computor as instructed
    a employee came into the shop area and placed a spray lubrication can into the wrong flamable and non flamable cabinet
    the following morning SQF food inspectors found the can in the wrong cabinet which gave us a 3-4 dimerit point/ s on an assessment. i was terminated 1 month later for cause

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