Confirms intent of 2019 legislation to ‘provide predictability around severance entitlement and liability’ for employers
An Alberta government employee who claimed constructive dismissal has lost her bid to escape a statutory cap on severance pay, in a ruling that marks the first time the province's courts have confirmed the 2019 fiscal legislation applies equally to all forms of termination.
Justice Kathryn Oviatt of the Alberta Court of King's Bench dismissed Leslie Twilley's application on October 7, dealing a significant blow to public sector workers seeking common-law damages when workplace changes force them out.
Twilley worked as a non-unionized public sector employee from March 4, 2019 to April 18, 2024. On April 19, 2024, she filed a statement of claim for constructive dismissal and sought a declaration that section 25.01 of the Public Service Act, which caps notice or severance at four weeks per year of service to a maximum of 78 weeks, did not apply to constructive dismissal.
Maximums on severance in legislation
Alberta's legislature amended the Public Service Act in 2019 through the Ensuring Fiscal Sustainability Act. The changes introduced a clear formula: employees terminated without cause receive "4 weeks for every full year of continuous service up to a maximum of 78 weeks." The law states this cap applies "notwithstanding any right existing at common law."
A separate section, 25.03, states that "neither the enactment or application of this section and sections 25.01, 25.02, 25.04 and 25.05 nor changes to the compensation that is payable to an employee as a result of those sections shall be considered constructive dismissal or breach of contract."
Twilley argued the legislative intent of section 25.01 was only to limit damages where the government expressly terminates an employee without cause and does not extend to constructive dismissal. The government argued that section 25.01 encompasses constructive dismissal as a form of termination without cause.
‘Type of termination without cause’
Justice Oviatt rejected the distinction. The court found that "constructive dismissal is therefore not a separate concept from termination without cause; rather, it is a form or type of termination without cause."
The judge found that in both termination without cause and constructive dismissal, the damages are identical. "These are the exact same damages that arise in constructive dismissal," she wrote, referring to damages for failure to provide reasonable notice or pay in lieu.
The court cited case law including Thompson v. Cardel Homes Limited Partnership, where the Alberta Court of Appeal observed that "when there is evidence of a unilateral change in the terms of employment, the employer runs the risk of being found by a court to have terminated the employee without cause."
Predictability around severance entitlement
The court found that excluding constructive dismissal from the severance cap would undermine the law's purpose. "A plain and ordinary reading of section 25.01 in context of the entire statute is that its intent is to limit the respondent's liability for severance pay and provide predictability around severance entitlement and liability," Justice Oviatt wrote.
She concluded that "leaving out constructive dismissal from the cap on termination pay is not logical or consistent with that intent and purpose and would create a gap in the statutory scheme."
The application was dismissed. Alberta's non-unionized public sector employees who claim constructive dismissal are now subject to the same 78-week ceiling as those formally terminated.
