Termination Without Cause in Alberta: When It Is Not Just About Notice

Bad faith termination in Alberta may involve much more than the severance amount offered at the end of employment. Courts may examine the full sequence of events, including changes in treatment, misleading communications, retaliation, and the manner in which the employer carried out the dismissal.

It did not begin with the termination. It began months earlier.

At first, the shift was subtle. Management reassigned responsibilities without explanation. Meetings that once included her moved forward without her. Other people made decisions affecting her role and communicated them only after the fact.

She raised concerns calmly. She was not aggressive or confrontational. She simply wanted to understand what had changed.

The response sounded measured but distant.

“We are restructuring.”

A few weeks later, she raised the issue again. This time, she spoke more directly because the explanation did not align with what she could see happening internally.

Shortly after that conversation, the tone changed.

Management suddenly placed her performance “under review.” New concerns appeared even though no one had documented them before. Expectations shifted, but only for her.

Then, as quickly as the situation escalated, the employer terminated her employment without cause. A severance offer followed, framed as fair and described as standard.

Her main question was not about the amount.

“Can they do this?”

If you are facing a similar dismissal, you can learn more about our Employment Law services or book a confidential consultation with Kedge Anchor Law.

Understanding Bad Faith Termination in Alberta

Employers often present termination without cause as a clean and uncomplicated exercise of their contractual rights. In many cases, an employer may end employment without alleging misconduct, provided it gives the employee lawful notice or pay in lieu.

However, courts do not always focus only on the final termination meeting. They may also examine the employer’s conduct before, during, and after the dismissal.

That broader review can become especially important when the employee alleges retaliation, misleading conduct, discrimination, reprisal, or unfair dealing.

As a result, bad faith termination in Alberta may create legal exposure beyond ordinary reasonable notice or contractual severance.

The Duty of Honest and Good Faith Performance

Canadian contract law imposes a duty of honest performance. Parties must not knowingly mislead one another about matters directly connected to contractual performance.

In C.M. Callow Inc. v. Zollinger, 2020 SCC 45, the Supreme Court of Canada emphasized that silence, half-truths, and strategic omissions may breach this duty when they knowingly mislead the other party.

In the employment context, this principle may matter when an employer maintains the appearance of continued employment while internally preparing to terminate the employee.

For example, an employer may create legal risk if it reassures an employee about job security while secretly finalizing a dismissal or encourages the employee to continue making commitments based on information the employer knows is false.

Damages Beyond Reasonable Notice

A wrongful dismissal claim often begins with the question of reasonable notice. However, the manner of dismissal may create separate damages when the employer acts unfairly or in bad faith.

In Matthews v. Ocean Nutrition Canada Ltd., 2020 SCC 26, the Supreme Court confirmed that damages for failure to provide reasonable notice remain distinct from damages connected to the employer’s conduct.

The legal analysis may therefore move beyond what notice the employer should have provided. Courts may also consider what financial, emotional, or professional loss flowed from the employer’s conduct.

This can include the loss of compensation or opportunities that the employee would likely have received during the notice period.

Aggravated and Punitive Damages

Courts may award aggravated damages when bad faith conduct during dismissal causes actual harm, such as mental distress. Punitive damages may also become available in exceptional cases involving malicious, high-handed, or seriously wrongful conduct.

In Strudwick v. Applied Consumer & Clinical Evaluations Inc., 2016 ONCA 520, the Ontario Court of Appeal upheld substantial damages arising from discriminatory, humiliating, and oppressive treatment during employment and dismissal.

These awards are not automatic. However, they show that an employer’s liability can extend well beyond ordinary notice when the surrounding conduct becomes particularly serious.

Statutory Reprisal Protections

Common law principles are not the only protections that may apply. Alberta legislation may also prohibit employers from punishing employees for exercising protected rights.

For example, Alberta occupational health and safety legislation protects workers who exercise certain workplace safety rights. The current legislation and guidance are available through the Government of Alberta Occupational Health and Safety resources.

If a termination closely follows a safety complaint, refusal of dangerous work, discrimination complaint, accommodation request, or another protected activity, the employee may need to consider statutory reprisal remedies in addition to a wrongful dismissal claim.

In these circumstances, bad faith termination in Alberta may overlap with human rights, occupational health and safety, employment standards, or other statutory protections.

What Bad Faith Termination May Look Like

Many employees focus immediately on the severance figure. However, the more important question may be why the termination happened when it did and how the employer handled the process.

Potential warning signs may include:

• sudden performance concerns after the employee raised a protected complaint;
• exclusion from meetings or decisions before dismissal;
• responsibilities being removed without a clear explanation;
• new allegations that conflict with the employee’s past reviews;
• shifting or inconsistent explanations for workplace changes;
• pressure to accept a severance offer immediately;
• misleading statements about restructuring or job security;
• retaliation after a safety, discrimination, or compliance concern; and
• humiliating or insensitive treatment during the dismissal process.

No single factor automatically proves bad faith. Instead, courts may examine the full timeline and determine whether the pattern supports the employee’s allegations.

Applying the Law to the Employee’s Experience

In this case, the termination could not be understood by looking only at the final meeting, the letter, or the severance package.

On its face, the employer presented the decision as a routine without-cause dismissal. Employers generally have the right to make that type of decision when they satisfy their legal obligations.

However, courts may look at the entire course of conduct. They can examine the sequence of events and ask whether the employer acted honestly, fairly, and without an improper motive.

Once the employee’s full timeline came into view, the narrative began to change.

Her concerns were measured and legitimate. She wanted to understand why her role and responsibilities had changed. Instead of answering those concerns directly, the employer gradually repositioned her within the organization.

Management narrowed her responsibilities. Other people made decisions around her rather than with her. Expectations that had once remained stable suddenly became unclear and unusually strict.

Problems that no one had raised before began to appear without a structured performance-management process. The timing made the new concerns look reactive rather than connected to her actual work history.

Good Faith in the Manner of Dismissal

In Wallace v. United Grain Growers Ltd., the Supreme Court recognized that employers owe obligations of good faith and fair dealing in the manner of dismissal.

The law later developed further in Honda Canada Inc. v. Keays, 2008 SCC 39. The Supreme Court explained that employees may recover damages when unfair, misleading, or insensitive dismissal conduct causes actual harm.

The analysis therefore does not stop at the notice period. Courts may consider the real impact of the employer’s conduct and whether the dismissal process caused additional compensable harm.

Here, the treatment changed soon after the employee asserted concerns that she had a right to raise. The progression from concern, to scrutiny, to termination created legitimate questions about reprisal and bad faith.

The legal issue was no longer simply whether the employer could terminate her. It became whether the employer exercised that right honestly, fairly, and free from an improper motive.

Once that broader context became part of the analysis, the legal framing changed. The case moved away from a narrow severance calculation and toward a review of the employer’s complete course of conduct.

What Employees Should Do

If your termination followed a period of tension, complaints, or sudden changes in treatment, consider the following steps:

• Review the full sequence of events leading to the dismissal.
• Preserve emails, messages, performance reviews, and meeting records.
• Document changes in duties, expectations, communication, or treatment.
• Identify any workplace rights or concerns you raised before termination.
• Avoid signing a severance release before receiving legal advice.
• Consider whether the employer’s explanation matches the documented timeline.
• Seek an assessment of both your notice entitlement and the manner of dismissal.

The context surrounding the termination often determines whether a claim remains limited to severance or extends to additional damages.

What Employers Should Do

Employers should approach termination decisions with careful attention to process, timing, and communication.

• Document genuine performance concerns consistently over time.
• Address concerns directly rather than creating a record only after a complaint.
• Avoid abrupt changes in expectations after protected employee activity.
• Provide honest and accurate information throughout the process.
• Review whether the timing could reasonably appear retaliatory.
• Ensure that decision-makers rely on legitimate business reasons.
• Handle the termination meeting respectfully and professionally.
• Obtain legal advice when human rights, safety, reprisal, or bad faith concerns may arise.

Employers should also remember that courts may examine the entire sequence rather than the final termination letter alone.

Why Bad Faith Termination in Alberta Matters

Bad faith termination in Alberta matters because an otherwise lawful dismissal can create additional liability when the employer handles it dishonestly, unfairly, or in retaliation for protected conduct.

Not every unpleasant termination amounts to bad faith. Employers may make difficult decisions, restructure roles, and end employment relationships without cause.

However, employers should not assume that exclusion, misleading explanations, sudden scrutiny, or retaliatory treatment will remain legally irrelevant simply because they provided severance.

Similarly, employees should not assume that the severance figure represents the entire legal analysis.

Speak With Kedge Anchor Law

Some terminations are routine. Others represent the final stage of a much broader workplace pattern.

If your dismissal followed sudden criticism, exclusion, retaliation, misleading statements, or changes that do not align with your previous employment history, a legal review can help determine whether your claim extends beyond reasonable notice.

Kedge Anchor Law advises employees and employers on wrongful dismissal, severance, workplace retaliation, and the manner of termination.

Book a confidential consultation with Kedge Anchor Law.