The B.C. Civil Resolution Tribunal has ruled that a termination-pay exemption under the province’s Employment Standards Act for construction-related businesses does not prevent employees from claiming reasonable notice under the common law.
The decision underscores that while employees “employed at one or more construction sites by an employer whose principal business is construction” may not be entitled to statutory termination pay, the ESA does not override an employee’s rights to compensation when they are dismissed without cause under common law principles.
Background
Hanington Painting hired I.L. in May of 2022 as a painter. The hiring agreement, which neither party disputed, established that he would receive $20 per hour and confirmed his job title. Notably, the agreement did not include any clause that set out how the employment relationship could be ended.
I.L. was laid off on July 20, 2023, with a record of employment (ROE) citing “shortage of work / end of contract or season.” He alleged the layoff was effectively a termination without cause.
The employer took the position it owed him no compensation, claiming it was exempt from severance obligations under ESA section 65(1)(e). That provision applies to employees who work at construction sites if their employer’s main business is construction.
Statutory termination versus common law
The tribunal found that while Hanington Painting may be exempt from statutory termination obligations, I.L. was not seeking statutory severance under the ESA. Instead, he was pursuing what he referred to as “common law severance,” which the tribunal described as damages in lieu of an employer providing reasonable notice.
“ESA section 65(1)(e) does not affect an employee’s entitlement to this reasonable notice,” the tribunal said, referencing Reotech Construction Ltd. v. Snider, a 2022 B.C. Supreme Court ruling.
It further explained that under the common law, dismissal without cause triggers an obligation on employers to provide either notice that the employment is ending or compensation in lieu of that notice. If an employee does not receive reasonable notice, they can bring a claim for damages often labelled “severance” or “pay in lieu of notice.”
Length of notice
The tribunal noted that the length of notice owed to a dismissed employee depends on several factors, including the character of the work, the length of service, the employee’s age, and the ease or difficulty of finding a similar role.
These considerations are drawn from leading employment law cases and are applied on a fact-specific basis. Because it accepted that I.L. found comparable work within three weeks of the layoff, the tribunal also factored in the extent to which he mitigated his losses.
Hanington Painting did not dispute I.L.’s calculation of $2,880, which represented three weeks of pay at his hourly rate. I.L. argued that three weeks’ severance pay was consistent with relevant jurisprudence, pointing to decisions indicating a short-service employee can be owed as much as two or three months’ notice. He believed the three-week figure was fair, given he secured new employment by Aug. 28, 2023.
3 weeks’ notice for 15 month’ service
After reviewing the evidence and I.L.’s length of service — approximately 15 months — the tribunal deemed a three-week notice period reasonable. It concluded the employer should compensate I.L. accordingly, explaining this was “consistent with the general rule of thumb that a starting point for notice is one month for every year of service,” though ultimately subject to individual circumstances.
In the absence of any contractual provision limiting notice or defining how termination would be handled, the tribunal said the common law default applies. That default sets a flexible range for notice or pay in lieu of notice, but it typically increases with an employee’s length of service and other relevant factors.
Since Hanington Painting did not show it had provided I.L. with adequate notice before ending his employment, and there was no argument challenging his account of how quickly he found a new job, the tribunal accepted his request for three weeks’ wages.
Jurisdictional issues
The ruling also addressed procedural and jurisdictional considerations. The tribunal explained it lacks the authority to decide claims for statutory entitlements under the ESA, which fall under the Director of Employment Standards. However, it does have jurisdiction over small claims that raise common law wrongful dismissal issues.
Because I.L. framed his complaint as a claim for damages outside of the statutory minimum standards, the tribunal could hear it.
The tribunal chose to conduct the hearing through written submissions, concluding this was sufficient to address the issues without requiring an oral hearing. In its view, there were no significant credibility disputes and the parties had supplied enough documentary evidence to permit a straightforward assessment.
As part of its final orders, the tribunal directed Hanington Painting to pay I.L. $2,880 for damages related to his notice entitlement, plus $150 for tribunal fees, which he was entitled to recover as the successful party. I.L. did not seek interest at the claim filing stage, so the tribunal declined to award any pre-judgment interest. Post-judgment interest would still apply if payment was not received by the specified deadline.
The decision emphasized that once validated, the tribunal’s order can be filed with the Provincial Court of British Columbia. At that point, it has the same force as a court order, allowing for enforcement if the amount remains unpaid.
Important distinction for construction employers
For employers in the construction sector and beyond, the tribunal’s ruling underscores an important distinction: an exemption from ESA termination obligations does not mean an employer is relieved of paying damages under the common law if it dismisses an employee without reasonable notice.
In other words, the ESA sets out minimum protections, but employees may still have broader rights to compensation when statutory language does not specifically limit common law entitlements.
For more information, see Lewis v. Hanington Painting Inc., 2025 BCCRT 182 (CanLII).
