Background
Christopher Plotnikoff was a long-term employee of Associated Engineering Alberta Ltd., working for nearly ten years as a Civil Engineering technologist. In April 2022, his employment was terminated without cause when he was 33 years old. Upon termination, the employer paid Mr. Plotnikoff only the minimum statutory termination pay required under Alberta’s Employment Standards Code (six weeks’ pay), and provided no additional severance or notice at common law. Mr. Plotnikoff’s written employment contract contained a termination clause which stated:
- Termination without Cause: “The Company may terminate employment without cause upon providing the Employee with notice as may be mandated by the Employment Standards legislation or such additional notice as the Company, in its sole discretion, may provide or, at our option, pay in lieu of such notice.”
Believing he was entitled to more than the statutory minimum, Mr. Plotnikoff sued for wrongful dismissal, claiming common law reasonable notice (severance pay) beyond the 6 weeks provided. At trial, the Alberta Court of Justice found in his favour – ruling that the termination clause did not eliminate his right to common law notice, and awarding 10 months of reasonable notice damages. The employer appealed to the Alberta Court of King’s Bench, arguing that the contract’s termination clause barred any further severance.
Key Legal Issues
On appeal, the Court of King’s Bench identified the central issue as:
- Enforceability of the Termination Clause: Did the termination clause in Mr. Plotnikoff’s employment contract effectively displace his common law right to reasonable notice (thereby limiting him to the statutory minimum or an amount in the employer’s discretion)?
Court’s Reasoning and Decision
1. Enforceability of the Termination Clause
Common Law Notice vs Contractual Clause: The Court began by reaffirming the fundamental principle that indefinite-term employment contracts carry an implied term requiring reasonable notice of dismissal at common law, unless the contract explicitly and clearly says otherwise. In other words, an employer’s obligation to give common law reasonable notice can be displaced only by clear, express contractual language that limits or extinguishes that right. Justice Thompson cited binding Alberta precedents – Holm v AGAT Laboratories Ltd, 2018 ABCA 23, and Bryant v Parkland School Division, 2022 ABCA 220 – which establish that a termination clause must use “clear and unambiguous” (or “clear and unequivocal”) language to remove an employee’s common law notice entitlement. Ambiguities are resolved in favour of the employee under general contract law and employment law principles.
Analysis of Clause 4(c): Applying these principles, the Court closely examined Clause 4(c) of Mr. Plotnikoff’s contract. The clause provided that on without-cause termination the company will give “notice as may be mandated by the Employment Standards legislation” or, at the employer’s discretion, “such additional notice” as it may choose to provide. Justice Thompson agreed with the trial judge that the first part of this clause – “notice as may be mandated by employment standards legislation” – merely confirms the statutory minimum notice the employee is entitled to, and ensures compliance with the Employment Standards Code. Crucially, this wording did not mention or exclude the possibility of greater notice; it made no reference to section 3 of the Code, which preserves employees’ civil remedies and greater entitlements. In Alberta, statutory notice under the Code is a floor, not a ceiling: unless the contract explicitly limits the employee to that minimum, the common law presumption of reasonable notice remains intact. As the Court noted (citing the Supreme Court of Canada’s decision in Machtinger), providing only the minimum standards “do[es] not operate to displace the presumption at common law of reasonable notice,” and any greater common law entitlement is considered a “benefit” that will prevail unless clearly taken away.
The second part of the clause – “or such additional notice as the Company, in its sole discretion, may provide” – also failed to clearly limit the notice period. Rather than specifying a fixed alternative notice period, this language left the amount of any additional notice unspecified. In Justice Thompson’s view, the clause was essentially silent as to any maximum term of notice, because it gave the employer discretion to grant more notice but did not guarantee any definite amount beyond the statutory minimum. According to established law, when a contract is silent or unclear about the length of notice, the court will imply the term that reasonable notice at common law is required (citing Machtinger and other authorities). By not unequivocally saying “no common law notice” or defining a concrete replacement notice period, the clause left a gap that the law fills with the usual implied term of reasonable notice.
Rejection of the Employer’s Argument (Nutting): The employer had relied on an earlier case, Nutting v Franklin Templeton Investments Corp, 2016 ABQB 669, which suggested that an employer could oust common law notice by expressly or impliedly indicating some other notice period. The King’s Bench in Plotnikoff expressly rejected the Nutting approach as inconsistent with binding Alberta law. Justice Thompson emphasized that merely implying a different notice entitlement is not enough – the contract must explicitly limit the common law right, with a high degree of clarity. Here, Clause 4(c) did not “specify some other period of notice” at all; it left the notice term open-ended, contingent on the employer’s discretion. Thus, the Nutting test was not met on the facts, and in any event Nutting itself was not followed, given the contrary guidance from the Alberta Court of Appeal and Supreme Court.
Conclusion on the Clause: The Court concluded that Clause 4(c), read in the context of the whole agreement, failed to clearly and unequivocally limit or remove Mr. Plotnikoff’s right to common law notice. The phrase “in its sole discretion” did not satisfy the stringent clarity requirement for contracting out of the implied reasonable notice term. As Justice Thompson put it, the clause did not meet the “clear and unambiguous…high level of clarity” test required by Holm and the Court of Appeal in Bryant to extinguish common law rights. Any uncertainty in the contract’s termination provisions had to be construed in favour of the employee, per long-standing legal doctrine. Therefore, Mr. Plotnikoff’s common law entitlement to reasonable notice was preserved by operation of law (reinforced by section 3 of the Employment Standards Code).
Having found the termination clause unenforceable, the Court upheld the trial judge’s decision that Mr. Plotnikoff was entitled to common law damages. The reasonable notice period of 10 months awarded at trial for this 9.9-year employee was not disturbed on appeal.
Legal Principles and Precedents Discussed
The Plotnikoff decision canvassed and reinforced several important legal principles in Canadian employment law:
- Common Law Presumption of Reasonable Notice: There is an implied term in indefinite employment contracts that employees will receive reasonable notice of dismissal (or pay in lieu) at common law, pursuant to the venerable Bardal factors. This presumption can only be rebutted by a clear contractual provision to the contrary, and only if it complies with minimum statutory requirements. The Court cited Alberta Court of Appeal cases (Holm and Bryant) to affirm that clarity is required to contract out of common law notice. If the language is ambiguous or silent about preserving common law rights, the employee retains the right to claim reasonable notice.
- Employment Standards Legislation as a Minimum Floor: Echoing Machtinger, the Court confirmed that the notice provisions of the Employment Standards Code set only minimum obligations; they do not displace greater entitlements. Section 3 of the Alberta Code expressly preserves an employee’s civil remedies and any “greater benefit” than the statutory minimum. Therefore, a contract that merely promises to meet the Code minimum (without more) will not be interpreted as opting out of common law notice. In Plotnikoff, because the clause did not explicitly limit notice to the statutory amount or say that statutory pay is “full and final satisfaction” of all claims, it left the door open to common law claims. The Court even contrasted Clause 4(c) with the much clearer clause from Nutting, which had explicitly stated that statutory notice/pay was in full satisfaction of “all rights…including…common law” – language notably absent in Plotnikoff’s contract.
- Requirement of Clear Language to Limit Rights: The Court affirmed the high threshold of clarity for termination clauses. The Court noted that any contract term purporting to limit an employee’s common law rights (whether notice or other entitlements like bonuses on termination) must be clear and unambiguous. If an employer wants an employee to give up something as significant as the right to lengthy notice (which can be worth substantial money), the contract should plainly spell this out. In Plotnikoff, the absence of an explicit statement that “only statutory notice will be given” or that common law rights are waived was fatal to the clause’s enforceability.
Broader Implications of the Decision
The Plotnikoff case carries significant implications for both employers and employees in Alberta:
- Drafting of Termination Clauses: Employers should take heed that ambiguous or discretionary language will not hold up in court if the aim is to limit termination entitlements. Clause 4(c) attempted to reserve discretion to the employer to perhaps give more than the minimum, but this very lack of a fixed entitlement was its downfall. The case sends a clear message: if an employer truly intends to cap an employee’s notice at a specific amount (even if it’s just the statutory minimum), the contract must say so in unequivocal terms. Vague phrases like “or additional notice at our discretion” leave uncertainty and will be interpreted in favour of the employee. Going forward, employers may need to include explicit language such as “this payment is in full satisfaction of all entitlements, statutory or common law”, or clearly state that no further notice or severance beyond the specified amount will be given. However, even a clearly drafted clause must also comply with employment standards minimums – a clause that provides less than the ESC minimum (or is capable of providing less) will be void under Machtinger. In practice, many Alberta employers might reconsider the wisdom of “ESC-only” termination clauses altogether, given that any drafting flaw or ambiguity will result in the clause being unenforceable and the employer owing potentially large common law severance.
- Employee Rights on Termination: For employees, Plotnikoff is an encouraging precedent. It reaffirms that receiving only the statutory minimum does not necessarily end the matter – if your contract’s termination clause is not crystal clear (or if you have no written contract), you likely maintain the right to claim full common law notice. Many employees sign contracts without understanding the termination provisions; this decision underscores that courts will not lightly assume an employee gave up tens of thousands of dollars in severance unless the agreement unmistakably says so. Employees should also be aware of section 3 of the Employment Standards Code, which preserves greater entitlements – meaning an employer’s compliance with the Code’s minimum does not immunize them from a wrongful dismissal claim for more. In short, even if an employer asserts “we paid you the amount required by law,” an employee may still be able to pursue additional severance under common law, unless a valid and enforceable clause limits that right.
In conclusion, Plotnikoff v Associated Engineering Alberta Ltd, 2024 ABKB 706 is a notable employment law decision that solidifies key principles in Alberta: termination clauses must be drafted with precision to remove common law rights. The case upholds reasonable notice protections for employees and exemplifies the Courts’ unwillingness to allow implicit or unclear contract language to strip away important employee entitlements. It serves as a guiding precedent for lawyers and HR professionals when crafting employment agreements and assessing wrongful dismissal damages, and it ultimately contributes to fairer outcomes by ensuring both parties’ rights and obligations are clearly understood.
*Always seek legal advice. The above is for information purposes only.
Stephen Dugandzic received his Juris Doctor degree from the University of Alberta in 2013 and is Calgary-based. He previously practised with Bennett Jones LLP and Taylor Janis LLP before founding YYC Employment Law Group in 2018 and Evolution Legal in 2026.