When an employee is let go without cause, Alberta courts decide how much “reasonable notice”, or pay in lieu, an employer must provide. For years, the upper limit for that notice has fairly consistently stayed around 24 months.
That changed with a recent Alberta Court of King’s Bench decision, Lischuk v. K-Jay Electric Ltd. (2025 ABKB 460). The Court awarded a long-serving employee 26 months notice. This is the first time a court in Alberta has gone beyond the traditional cap.
For employers, it’s a wake-up call. The decision confirms that 24 months isn’t a hard limit and highlights the financial risk of having weak or missing employment contracts.
The Case in a Nutshell
Mr. Lischuk started working for K-Jay Electric as a young man and continued for 34 years, rising to a senior leadership role. When his employment was terminated, there was no written employment agreement limiting his severance entitlements.
At age 58, nearing retirement and having spent his entire career with one employer, his chances of finding comparable work were limited. The Court decided that these “exceptional circumstances” justified 26 months of notice, rather than the typical 18-24 month upper range.
The Court also ruled that Mr. Lischuk was entitled to bonus and vacation pay through that notice period and made it clear that an employer must prove that comparable jobs were available if it wants to reduce damages based on a failure to mitigate.
Why This Case Matters to Employers
This case drives home an important point: without a clear, enforceable employment agreement, your business could face full common-law notice entitlements, and those entitlements can now stretch beyond 24 months.
Even if your business has never had an issue before, it’s worth reviewing your employment documentation now. Courts look closely at clarity, fairness, and consistency in how employers handle terminations. “Boilerplate” contracts downloaded years ago often don’t hold up and can leave an employer exposed.
What Counts as “Exceptional Circumstances”?
The Court did not say every long-service employee will get more than 24 months. But it did spell out the kinds of situations that can justify going higher. These include:
A very long period of service, often starting early in life and continuing until near retirement.
A senior or specialized role, with few comparable opportunities in the job market.
A strong history of loyalty and reliance on one employer, making termination effectively a form of forced retirement.
In short, when a long-serving, senior employee is dismissed late in their career, the potential payout can be far greater than before, especially without a written agreement in place.
Common Contract Issues to Watch For
Many of the problems that led to this costly result are avoidable. Employers should be on the lookout for these pitfalls:
No written employment agreement. Without one, courts automatically apply the full common-law notice period.
Termination clauses that are unclear or incomplete. Even small wording errors can make a clause unenforceable.
Bonus or variable pay plans that don’t detail what happens after termination.
Shareholder or incentive arrangements that conflict with employment terms.
Untracked vacation accruals that lead to unexpected liabilities.
A review by an employment lawyer can often quickly fix these issues before they become expensive.
“Mitigation” Isn’t Automatic Protection
Employers sometimes assume that if a dismissed employee does not actively look for a new job, the damages should be reduced. The Lischuk decision reminds us that the burden is on the employer to prove that comparable jobs were available and that the employee could likely have secured one.
If you can’t show evidence of those opportunities, the court may not reduce the award, even if the employee did not look for work.
The takeaway: always document your understanding of the job market when you terminate an employee, and seek advice before assuming a duty to mitigate will reduce your exposure.
Practical Steps for Alberta Employers
You don’t need to overhaul your HR system to protect your business. Start with these steps:
Review your employment agreements.
Do all staff, especially senior and long-term employees, have written agreements?
Do those agreements clearly define notice, pay in lieu, and bonus treatment on termination?
Check your vacation and bonus policies.
Are vacation accruals properly tracked?
Are bonuses, commissions, and profit-sharing clearly addressed in writing?
Clarify your shareholder or ownership arrangements.
If key employees also hold shares or profit interests, make sure both sets of documents align.
Plan for mitigation.
When terminating, keep records of comparable job openings and the employee’s skill set. This helps defend against inflated notice claims.
Review regularly.
Revisit employment agreements every few years or when employees are promoted or roles change. Laws and judicial attitudes evolve quickly.
Final Thoughts
The Lischuk decision doesn’t mean every dismissal will result in 26 months of pay. But it does mean Alberta employers can no longer rely on 24 months as a ceiling.
For smaller businesses, the message is simple: don’t wait for a dispute to test your contracts. A short legal review now can prevent a six-figure claim later.
SVR Lawyers can help you update your employment agreements, review your termination policies, and strengthen your contracts to reduce future risk.
