Executive Severance in Alberta
Executives, like other employees are susceptible to being terminated from their employment. We are often asked what the difference is between executive severance and severance of regular employees.
The Bardal factors and executive roles
The case of Bardal v. Globe and Mail (1960)24DLR(2d)140 included the character of employment as a key role in severance amounts owing. The outcome of that has been over the years that executive level positions were paid more severance because they were considered by the courts to take longer to find alternative employment. Recent cases have begun to revisit this theory. The Alberta Court of Queen's Bench said in the case of Bahrami v. AGS Flexitallic Inc., 2015ABQB536 at 33: "Appellate courts today are becoming reluctant to presume without evidence that clerical and managerial employees suffer different lengths of unemployment following dismissal". If you wish to read that case, it can be found here: https://www.canlii.org/en/ab/abqb/doc/2015/2015abqb536/2015abqb536.html?resultIndex=1
Severance in an executive setting is calculated the same as severance for other employees, although the total compensations tend to be higher. In our experience, executives tend to have contracts of employment. It has also been our experience that many contracts of employment do not fully or properly address severance issues. While some companies wish to wrap up issues with departing executives quickly, the tactic of lowball offers is often used in the executive setting as well. Companies terminating executives often have the advantage of experienced employer defence counsel to advise them.
If you are an executive and you have been terminated, please feel to contact us for legal advice in this matter: https://www.flodenward.com/contact-us.
The information contained in this article is not legal advice. No solicitor client relationship is formed through this article. The reader is encouraged to retain counsel for advice in these matters.