Our clients often ask what is the point of having a properly drafted employment contract? As they say, “the outcome of a claim for wrongful dismissal cannot be that bad; everyone knows that the most an employee might receive is a month per year of service, and sometimes that is not that much”, right?
The reality is much different, and a notice period for an employee can vary drastically. The calculation of this stems from the “Bardal factors”, including:
- the employee’s age,
- length of service, and
- character of employment,
among other factors.
There is no hard metric for determining these, and instead comes to the application of a judge’s assessment of these factors. The straight “one month per year of service” standard used in calculating an employee’s notice period is often ungrounded in reality. From time to time, a court case clearly demonstrates that there is much more involved in calculating notice than a simple equation of years of service into months of notice. We have seen employees with less than a year of service awarded more than half a year of severance. Conversely, we have seen long-service employees get less than a month for every year that they worked.
Gale v Fairmont Hot Springs Resort Ltd.1 is a clear example, demonstrating an award well in excess of one month per year of service based on all relevant factors.
The Facts
The plaintiff was a sixty three year old Director of Sales and Marketing, hired in October 2020, earning $142,000.00 plus the option to participate in a bonus plan up to 25% of his salary. His employment agreement stated that termination without cause could be done “upon fulfilling its obligations pursuant to the common law,” and a separate clause indicated any bonus would only be paid if the plaintiff had not ceased employment when the defendant determined it was payable.
In February 2024 the defendant advised the plaintiff that his employment was being terminated without cause, to be effective after three weeks of working notice. The defendant offered the employee an additional 3.3 months of his gross annual salary in exchange for a release. The plaintiff did not accept and sued.
The Court ultimately arrived at a notice period of nine months. The judge acknowledged the plaintiff’s relatively short length of service, but found that the senior nature of his role (supervising staff and revenue generating activities) and his age (63) justified a significantly higher award than his short service would otherwise suggest. The Court also awarded the plaintiff an amount in lieu of a bonus during the notice period, noting that despite the bonus being “discretionary,” his employment history suggested he would have received a prorated bonus.
In all, the plaintiff was awarded $114,842.50, representing the nine months’ notice period less amounts paid and the prorated bonus for the notice period.
Takeaways
Gale powerfully illustrates the necessity of having an enforceable employment agreement that limits an employee’s dismissal entitlements to the statutory minimum. The termination clause in this case—which vaguely referenced “fulfilling its obligations pursuant to the common law”—was effectively useless, defaulting the entitlement to a common law assessment.
At three and a half years of service, the plaintiff was entitled to three weeks’ notice or pay in lieu of notice under the Employment Standards Act2. An employment agreement could have limited Mr. Gale’s entitlement to this amount, as well as limiting the types of compensation that would make up his statutory entitlement. There was not one in place, and instead, Mr. Gale’s entitlement on dismissal was based on the assessment of his notice entitlement, leading to this award.
Fortunately, we are here to help employers draft and implement strong contracts and policies. As Stuart likes to say, these are employers’ single best way to limit dismissal costs, and Gale serves as a stark example of the financial exposure when such preventative documents are not in place.
Employees can also benefit greatly from working with counsel. We work with employees who have been dismissed to assess their severance entitlements, negotiate a package in line with their entitlements, and if need be, to litigate their cases.
Think you need an employment lawyer? You probably do!
Sources
- Gale v Fairmont Hot Springs Resort Ltd., 2025 BCSC 2690 (CanLII), <https://canlii.ca/t/kjh5z>, retrieved on 2026-03-19
-
Government BC. “Employment Standards Act.” Gov.bc.ca, 2021, www.bclaws.gov.bc.ca/civix/document/id/complete/statreg/00_96113_01.
