In a notable decision that will impact how severance pay is negotiated and awarded in Alberta, the Court in Lischuk v K-Jay Electric Ltd, 2025 ABKB 460 has awarded 26 months of pay in lieu of notice, surpassing what some employment lawyers in the province previously considered a cap of 24 months for the reasonable notice period.
This decision introduces a layer of complexity for both employees and employers when it comes to understanding and asserting their rights reasonable notice for employee’s in senior roles who spend most of the career with one employer.
The Traditional Approach to Reasonable Notice Period in Alberta
Historically, Alberta courts and employment lawyers have operated under the understanding that the maximum common law entitlement to notice or severance is 24 months. Previous judicial decisions have referred to 24 months as a “rough upper limit,” shaping the expectations of both employers and employees alike.
For example, a senior executive nearing retirement, with over 20 years of service, might be considered eligible for the full 24 months, but not more.
This informal limit influences settlement negotiations, litigation strategies, and employment contract drafting throughout Alberta.
Breaking the 24-Month Barrier
In Lischuk, the Alberta Court of King’s Bench broke from this precedent and awarded the employee 26 months of pay in lieu of notice. In order to arrive at this decision, the Court relied on a line of cases from Ontario that deal with “exceptional circumstances” that make 24 months’ notice insufficient.
The Court explained when these circumstances might apply:
“Exceptional circumstances” usually arise where an individual begins working for a company as a young adult and is terminated near potential retirement age, after becoming a key or highly specialized employee. The employee, upon termination, is in a situation where their prospects of obtaining similar and comparable employment are significantly limited based on factors specific to their singular employment, such that they have effectively been “forced into retirement”.
The Court in Lischuk then noted that exception circumstances were present in this case: (1) the employee started working for the employer in his early 20s, and his employment was terminated when he was in his late 50s; (2) the employee started as a laborer and worked his way up to the role of general manager, and was even a shareholder of the company; and (3) the employee had limited prospects for alternate employment.
Based on these factors the Court awarded 26 months of pay in lieu of notice.
What This Means for Employees in Alberta
If you are an employee who:
- Has spent your entire career with one employer,
- Was promoted internally to a senior leadership role, and
- Your employment was terminated near retirement age,
You may be entitled to more than 24 months of severance or pay in lieu of notice. However, it must be stated that the Court in Lischuk expressly noted:
…the rarity of cases providing for reasonable notice in excess of 24 months in the last 60 plus years speak to the caution that a court should exercise about exceeding this rough upper limit.
With this quote in mind, a careful analysis is required to assess whether an employee can reasonably claim more than 24 months of pay in lieu of notice.
What This Means for Employers in Alberta
This case adds a new dynamic for Alberta employers involved in negotiations and litigation over common law notice. In order to mitigate the impact of this factor, our advice for employers is use properly drafted employment contracts. The best protection against uncertain and expensive wrongful dismissal claims is a contract that clearly limits severance obligations through a valid termination clause. This clause can limit notice to the mandatory minimums in the Employment Standards Code, or some other amount set by contract.
With this contract in place you can still offer notice or pay in lieu of notice that reflects common law, but the terms of the agreement ensure you can avoid prolonged disputes.
Contact Us
Cashion Legal is a boutique employment law firm based in Calgary, Alberta, representing both employees and employers in all aspects of workplace law. From contract drafting to wrongful dismissal litigation, we deliver professional, strategic, and approachable legal guidance.
If you have any questions about the content of this blog post do not hesitate to contact our office today.