Exceptional Circumstances and the Enhanced Risk They Pose to Employers

Justice Angotti of the Alberta Court of King’s Bench provided some clarity around the type of exceptional circumstances that can lead to an award of notice in excess of 24 months in the decision of Lischuk v. K-Jay Electric Ltd., 2025 ABKB 460. Generally, notice periods for without cause terminations are capped at 24 months, barring the court finding the existence of exceptional circumstances. It is unusual to see a decision where the court has found more than 24 months to be appropriate and where they do there is usually something unusual about the background facts. In Lischuk the Court provided clarity around the type of circumstances that are necessary to exceed the “cap.”

Mr. Lischuk had worked for K-Jay Electric Ltd. virtually his entire working life, starting out as a helper and working up to the position of general manager during his 34 years of employment. He was 58 years old at the time that his employment was terminated, and he did not look for alternate work following his termination. Justice Angotti, after a review of relevant authorities, found that severance awards should not exceed 24 months except in “exceptional circumstances” concluding:

[20] “Exceptional circumstances” usually arise where an individual begins working for a company as a young adult and is terminated near potential retirement age, after becoming a key or highly specialized employee. The employee, upon termination, is in a situation where their prospects of obtaining similar and comparable employment are significantly limited based on factors specific to their singular employment, such that they have been effectively “forced into retirement.”

The decision in Lischuk demonstrates the enhanced risk that employers face when terminating long term employees without an enforceable employment agreement, particularly in circumstances of advanced age. While employers will generally rely on the rough upper limit or cap of 24 months in those circumstances, there are a variety of factors that can push the notice period higher. The case law demonstrates that the following factors will be relevant:

1. Lengthy services – typically employees with greater than 30 years service with the same employer.
2. Advanced age – which necessarily follows the lengthy period of service but is a factor that will be considered, particularly when the termination effectively results in the retirement of the employee.
3. Specialized or non-transferable skills – such as those that are tied closely to the employer’s operations which make re employment difficult or impossible.
4. Exclusivity of the employment history – for those employees that have worked essentially their entire work life for the same employer there is enhanced risk of a notice period exceeding the notional cap.
5. Geographic limitations – such as living in areas with limited job opportunities.
6. External factors which impact job markets – such as the COVID-19 pandemic and likely the economic uncertainty faced by some industries due to tariffs.

The cap of 24 months on notice is not absolute, but it will fall to a dismissed employee to demonstrate that exceptional circumstances exist that should result in an award in excess of the cap. The risk can be managed through effective and enforceable employment agreements which if executed correctly, can be imposed even after the employee’s employment has commenced. Ensuring adequacy and enforceability of employment contracts is an integral part of risk management for any company.

For questions about this topic or any other workplace law matters, please reach out to Rose Keith, KC or a member of our Workplace Law team. You can also explore more insights by browsing our latest blog posts here.