Long service can be an important factor that could affect the amount of notice or payment that you are entitled to upon termination. We recommend speaking to an employment lawyer about your entitlements if you find yourself in this circumstance.
One of Two Ways Length of Service can Affect Termination Pay
The Employment Standards Act of BC sets out how your length of service affects any termination pay that you are entitled to at Part 8 – Section 63. It reads:
63. (1) After 3 consecutive months of employment, the employer becomes liable to pay an employee an amount equal to one week’s wages as compensation for length of service.
(2) The employer’s liability for compensation for length of service increases as follows:
(a) after 12 consecutive months of employment, to an amount equal to 2 weeks’ wages;
(b) after 3 consecutive years of employment, to an amount equal to 3 weeks’ wages plus one additional week’s wages for each additional year of employment, to a maximum of 8 weeks’ wages.
(3) The liability is deemed to be discharged if the employee
(a) is given written notice of termination as follows:
(i) one week’s notice after 3 consecutive months of employment;
(ii) 2 weeks’ notice after 12 consecutive months of employment;
(iii) 3 weeks’ notice after 3 consecutive years of employment, plus one additional week for each additional year of employment, to a maximum of 8 weeks’ notice;
(b) is given a combination of written notice under subsection (3) (a) and money equivalent to the amount the employer is liable to pay, or
(c) terminates the employment, retires from employment, or is dismissed for just cause.
(4) The amount the employer is liable to pay becomes payable on termination of the employment and is calculated by
(a) totalling all the employee’s weekly wages, at the regular wage, during the last 8 weeks in which the employee worked normal or average hours of work,
(b) dividing the total by 8, and
(c) multiplying the result by the number of weeks’ wages the employer is liable to pay.
(5) For the purpose of determining the termination date under this section, the employment of an employee who is laid off for more than a temporary layoff is deemed to have been terminated at the beginning of the layoff.
(6) If, after 3 consecutive months of employment, an employee gives notice of termination to the employer and the employer terminates the employment during that notice period, the employer is liable to pay the employee an amount equal to the lesser of
(a) an amount in money equal to the wages the employee would have earned for the remainder of the notice period, or
(b) an amount in money equal to the amount the employer is liable to pay on termination
If an employer gives written notice of termination, the employee is entitled to work during the notice period. Once notice is given, conditions of employment, including hours of work, must not be altered without the consent of the employee.
Vacation pay is payable on compensation for length of service.
Written notice of termination under this section must not coincide with an employee’s annual vacation.
Periods of temporary layoff during employment do not reduce an employee’s length of service for the purpose of calculating compensation for length of service.
Second Way Length of Service Affects your Termination or Severance Pay
If you are entitled to reasonable notice (which can occur if you have no written contract or your written contract is silent about termination), your length of service is one of the 4 main factors assessed to determine your notice or compensation. The longer you have served usually correlates with greater termination or severance pay.
If you have received a termination letter and aren’t sure whether your employer is providing you everything you entitled to, please contact an employment lawyer today.