Reasonable Notice, Working Notice, Pay in Lieu of Notice, and Severance Pay – What are the Differences?

Reasonable notice, working notice, pay in lieu of notice, and severance pay are terms often used in employment law, especially in cases of termination or dismissal. While these terms are frequently used interchangeably, each of these forms of compensation relating to dismissal represent distinct and separate concepts. In this blog article, we will explain each term and the differences between them.

Reasonable Notice

Reasonable notice is the notice period an employer must provide to an employee pursuant to common law when the employee has been terminated without cause. This notice period allows the employee to seek new employment and take steps to mitigate any loss that may result from the termination of their employment.

When determining the amount of reasonable notice to which an employee is entitled, the Court can take into consideration a number of factors. However, some of the most important factors taken into consideration include your age, length of service with the company, the nature of your position, your education and work experience, and the availability of comparable job opportunities in the market.

Generally, an employer has the option to choose between providing working notice or pay in lieu of notice, or a combination of the two as is further explained below.

In most cases, an employee’s entitlement to reasonable notice of termination is more generous than the minimum entitlements outlined in the British Columbia Employment Standards Act (the “ESA”). It should be noted, however, that an employee may not be entitled to reasonable notice if their employment contract limits their termination notice entitlements to what is set out in the Employment Standards Act.

For a more detailed explanation of this topic, read our blog article about “Reasonable Notice”.

Working Notice

An employer may provide “working notice” to inform the employee in advance of their termination. The employee is expected to continue working for the duration of the notice period before their employment officially ends. During this time, the employee may have the opportunity to search for a new job while still receiving their regular salary and benefits.

An employer may choose to combine “working notice” with “pay in lieu of notice.” For example, if an employee is entitled to 8 weeks of termination notice, the employer may provide the employee with 4 weeks of working notice before terminating their employment and then provide the employee with an additional 4 weeks of pay in lieu of notice.

Pay in Lieu of Notice

An employer may decide that they do not want the employee to continue working once they have been advised that their employment will be terminated. In such cases, the employer will provide the employee with “pay in lieu of notice”, instead of a working notice. This means that the employee is terminated effective immediately and they are provided with either a lump sum payment or a salary continuation package that is equivalent to the wages they would have earned if they had worked during their reasonable notice period.

Severance Pay

In British Columbia, severance pay is a term used to refer to the payment an employee receives or is entitled to when their employment is terminated without cause.

The amount of severance an employee is entitled to depends on the terms of their contract and whether notice of termination is limited to the statutory termination notice set out in the Employment Standards Act.

If you have questions regarding the amount of severance to offer to an employee or whether your employer has offered you a fair severance package, it is best that obtain legal advice before you make a decision.

At Labour Rights Law we offer in-person, telephone, or video consultations, where you can speak to one of our experienced and knowledgeable lawyers about all your employment-related concerns and question.

DISCLAIMER: The content of this article, and this website generally, is not intended as legal advice and cannot be relied upon as legal advice.  To provide legal advice on your problem, a lawyer must first understand your specific situation.

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