thanx A.I / Termination clauses
It is the most common termination clause in British Columbia and it fails at the twelve-month mark. When it fails, the cap on what you owe disappears.
Open your employment agreement and search it for wording like this:
“one week’s notice for each completed year of service, to a maximum of eight weeks”
Or any variation on it — one week per year, a week for every year worked, notice equal to one week per completed year. It is one of the most common termination clauses in British Columbia, and it has a defect in it that most people who signed it have never been told about.
Section 63 of the Employment Standards Act sets out what an employer owes an employee as compensation for length of service. The schedule is:
After 3 consecutive months — one week’s wages.
After 12 consecutive months — two weeks’ wages.
After 3 consecutive years — three weeks’ wages, plus one additional week for each additional year, to a maximum of eight weeks.
Now do the arithmetic on the clause. At twelve months, “one week per completed year” pays one week. The Act requires two.
The clause matches the Act at three years. It matches at the eight-week cap. It fails at twelve months, and that is enough. A clause only has to fall below the statutory floor at one point in its life to be a clause that contracts out of the Act.
Section 4 of the Act says its requirements are minimums and that an agreement to waive them has no effect. So a termination clause that pays less than section 63 at any service band is not simply topped up to the minimum. It is void.
And this is the part that costs money: when the clause goes, the cap goes with it. The eight weeks was a term of a contract that no longer binds anyone. What replaces it is common law reasonable notice, which is set by a court on the facts — age, length of service, seniority, how hard the role is to replace — and which has no statutory ceiling at all.
Common law notice commonly runs to several months for a long-service employee. For two people let go in the same month it is not unusual for the combined exposure to pass $80,000. That is a number that ends small companies, and it arrives from a sentence nobody read closely.
The instinct, on finding this out, is to print corrected agreements and have everyone sign.
In British Columbia that does not bind. Varying an existing employment agreement requires fresh consideration — the employee has to receive something new in exchange. Continuing to employ somebody is not something new; they already had that.
A corrected contract signed for nothing is a corrected contract that binds nobody. What does work is timing it to a moment when something is genuinely being given: a raise, a promotion, a bonus, a new benefit, or a new hire signing before their start date.
Which means the fix is a schedule laid over your payroll calendar, not a mailout. That is slower, and it is the only version that holds.
Upload the agreement and we read it against the current Act and the decisions that interpret it. Every finding names the section it fails under. It takes about three minutes and the findings are free — there is no account and nothing to sign.
We are not a law firm and this is not legal advice. A lawyer licensed in British Columbia must review and approve anything before you issue it to an employee. What we do is find the problems and draft the replacement wording, so the lawyer is checking work rather than starting it.
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