In Alberta, employees are generally entitled to reasonable notice of termination if their employment is ended without cause, unless a valid termination clause in their employment contract specifies otherwise. Reasonable notice is the amount of time an employer must provide an employee before termination to allow the employee to secure alternative employment. The length of reasonable notice depends on various factors, including the employee’s length of service, age, position, and the availability of similar work.
Singh v Clark Builders
A recent decision by the Court of King’s Bench of Alberta deviates on what the Courts will look for to determine whether an employment contract removes the right to reasonable notice. In Singh v Clark Builders, 2025 ABKB 3, the Court found that a notice provision incorporated into an employment agreement stating “90 days’ notice to terminate to be provided by the employee and a 90 days’ notice period for the employer” was sufficient to supersede the implied term of reasonable notice. Notably, the decision does not reference any language in the employment agreement that clearly addresses the employee’s right to common law notice. Instead, the Court emphasized the protracted negotiation between the parties and the sophistication of the employee as evidence that the employee understood his employment could be terminated on 90 days’ notice and that he was not entitled to any further notice.
Alberta Termination Clause Case Law
This decision marks a significant deviation from prior case law from the Alberta Court of Appeal and the Supreme Court of Canada.
In Holm v AGAT Laboratories Ltd, 2018 ABCA 23, the Court of Appeal confirmed the longstanding principle that “the common law presumption of termination only on reasonable notice can be rebutted through clear and unambiguous language in an employment contract specifying a different notice period” [emphasis added]. Subsequently, in Bryant v Parkland School Division, 2022 ABCA 220, following Holm, the Court of Appeal explained:
The starting point, then, is that there is a presumption of an implied term requiring the employer to provide reasonable common law notice on dismissal. Only where the employment contract unambiguously limits or removes that right will the presumption be rebutted, and the implied term ousted [emphasis added].
The Alberta jurisprudence is supported by the Supreme Court of Canada’s decision in Matthews v. Ocean Nutrition Canada Ltd., 2020 SCC 26, which explains that the assessment of damages for common law notice requires the Court to assess whether “the terms of the employment contract or bonus plan unambiguously take away or limit that common law right” [emphasis added].
Departure From Established Analysis
Considering this well established line of reasoning, there are two things about Singh that are particularly noteworthy:
- All three of these authorities clearly reference that the employment contract itself must unambiguously limit the right to common law notice. Conversely, the Court’s decision in Singh does not identify any language in the employment contract that unambiguously limits this right, but only identifies language that references another notice period.
- The Court’s focus on the surrounding circumstances is novel for this type of analysis. While there is established jurisprudence that confirms that surrounding circumstances must be considered, the clear authorities explaining that the right to common law notice must be addressed by unambiguous language in the contract are more pertinent to the facts of this case.
Impact on Alberta Severance Negotiations
The impacts of this case will likely be immediate in severance negotiations throughout Alberta. Employees will likely try to distinguish this case based on the unique circumstances before the court, including the sophistication of the plaintiff and the protracted negotiation of the employment contract. Conversely, employers will see this as a win and rely on comparable surrounding circumstances to argue against employees’ entitlement to reasonable notice.
Alberta Termination Clause Lawyers
Cashion Legal is a litigation law firm in Calgary focused on employment disputes, non-competetion disputes, and shareholder disputes. We have extensive experience in assessing issues related to termination clauses and common law notice entitlements.
This article is intended to help educate the general public and the legal community on recent developments in employment law. Reviewing this article is not a sufficient substitute for legal advice. If you need legal advice, contact us today.