In New Brunswick, common law severance (reasonable notice) is vastly more generous than the minimums in the Employment Standards Act. Depending on your age, length of service, and position, you may be entitled to anywhere from a few months up to 24 months of full pay and benefits.
When an employer in New Brunswick decides to let you go “without cause,” they owe you financial compensation to help bridge the gap until you find a new job. Many workers mistakenly believe that severance is simply one or two weeks of pay per year of service. This is a massive misconception that costs employees thousands of dollars.
While the provincial government sets absolute minimums, the courts look at “common law.” Common law is based on decades of rulings by judges at the Court of King’s Bench. Unless you signed a very specific, legally binding contract limiting your rights, you are generally entitled to full common law severance. Here is a clear guide on how your true legal entitlements are calculated in New Brunswick.
Step-by-Step Process for Assessing Your Severance
Calculating severance is more of an art than a strict mathematical formula. Whether you were an executive in Moncton, a factory worker in Bathurst, or a manager in Fredericton, the courts use a specific set of rules to determine what is fair.
Step 1: Check the Statutory Minimums First
Start by identifying your baseline. The New Brunswick Employment Standards Act outlines the absolute minimum notice a company must provide . For example, if you have worked there for more than five years, the statutory minimum is merely four weeks of notice or pay in lieu. This is just the starting point, not the finish line.
Step 2: Apply the “Bardal Factors”
To find out your true common law entitlement, lawyers and judges use the “Bardal factors” (named after a famous Canadian court case). They look at four main things: your age, your total length of service, the character of your employment (e.g., senior management vs. entry-level), and how difficult it will be for you to find similar employment in the current local economy.
Step 3: Review Your Original Employment Contract
Your employer may try to limit your severance to the statutory minimums using a “termination clause” in your original employment contract. However, many of these clauses are poorly written and legally invalid 📝. If a local employment lawyer determines that your termination clause violates the Employment Standards Act in any way, the court will throw it out entirely, and you will be entitled to full common law severance.
Step 4: Demand Your Full Compensation
Severance is not just your base salary. A fair common law package must include the complete value of your compensation during the notice period. This includes continued health and dental benefits, car allowances, RRSP matching, and any bonuses or commissions you would have naturally earned during those months.
How the Bardal Factors Impact Your Payout
Here is a breakdown of how a judge in New Brunswick views the specific details of your career when calculating your severance:
| The Factor | How it Impacts Your Severance Amount |
|---|---|
| Your Age | Older workers (typically over 50) are generally awarded higher severance because it often takes them much longer to find a comparable job. |
| Length of Service | Long-term, loyal employees receive significantly more notice. Decades of service can push an award toward the upper limit of 24 months. |
| Character of Employment | Specialized professionals or senior executives usually get more time, as highly specific roles are scarce in smaller New Brunswick markets. |
How Much Does it Cost to Fight for Fair Severance?
If your employer is stubbornly refusing to offer fair common law severance, you will likely need a lawyer to negotiate for you:
- Demand Letters: Having an employment lawyer draft a strong, legally backed demand letter to your former employer generally costs between $500 CAD and $1,500 CAD.
- Contingency Fees: If the case requires heavy negotiation or a lawsuit, many lawyers work on contingency, taking 25% to 35% of the increased severance they secure for you, meaning no upfront costs.
- Court Litigation: If you must go to a full trial at the Court of King’s Bench, legal fees can exceed $15,000 CAD, though the losing side is often ordered to pay a portion of these costs.
How Long Does the Process Take?
If your employer recognizes they made a mistake, a lawyer can often negotiate a fair common law settlement within 3 to 8 weeks. However, if the company refuses to negotiate and you are forced to file a formal lawsuit for wrongful dismissal, reaching a settlement at mediation or waiting for a trial can take anywhere from 8 months to 2 years.
Frequently Asked Questions (FAQ)
Is there a strict rule of “one month per year of service”?
No, this is a very common myth. While “one month per year” is a rough baseline some lawyers use for quick estimates, the courts do not use this formula. A 60-year-old employee who only worked somewhere for 2 years might easily get 6 months of severance due to their age and job market difficulty.
Do I get common law severance if I am fired “for cause”?
Generally, no. If you are legitimately fired for severe misconduct (like theft, violence, or extreme insubordination), you are not entitled to severance. However, “just cause” is incredibly difficult for an employer to prove in a New Brunswick court. Many “for cause” terminations are actually wrongful dismissals in disguise.
Does my employer have to pay out my unused vacation?
Yes. Under the Employment Standards Act, any earned but unused vacation pay must be paid out to you on your final cheque, completely completely separate from your severance package. Your employer cannot use your own vacation money to fund your severance.
What happens if I find a new job right away?
Common law severance is meant to cover your period of unemployment. If you sue for 12 months of pay but find a great new job in month 3, your “damages” are considered mitigated. This is why severance is often paid as salary continuation, which stops or reduces once you are re-employed.
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