Background and Issue
In Twilley v Alberta, 2025 ABKB 587, Leslie Twilley was a non-unionized Alberta public sector employee. After leaving her position, she filed a civil claim alleging constructive dismissal and sought a declaration that section 25.01 of the Public Service Act (“PSA”) – which limits severance pay – did not apply to her situation. The central issue before the Alberta Court of King’s Bench was whether the PSA’s statutory cap on termination notice/severance applies to a constructive dismissal, or only to an express termination by the employer. This was the first Alberta decision to address this question. Twilley essentially argued that her constructive dismissal claim should yield full common-law damages (reasonable notice) unaffected by the statutory cap, whereas the Province maintained that the cap equally restricts recovery in constructive dismissal cases.
Statutory Framework: Public Service Act Severance Cap
In 2019, Alberta amended the PSA via the Ensuring Fiscal Sustainability Act, introducing limits on termination notice and severance for public service employees. Section 25.01(3) of the PSA provides a formula capping notice or pay in lieu for termination without cause at 4 weeks per year of service to a maximum of 78 weeks, “notwithstanding any right existing at common law”. In other words, the statute explicitly overrides the broader reasonable notice periods that the common law might impose. Section 25.03 further stipulates that the enactment or application of these new provisions (sections 25.01, 25.02, 25.04, 25.05) and any resultant changes to an employee’s compensation “shall not be considered constructive dismissal or breach of contract.” This was meant to ensure that implementing the new capped severance regime itself would not trigger claims of constructive dismissal or contractual breach. Twilley’s employment was governed by the PSA , so these provisions framed the dispute.
Twilley’s Arguments
Twilley advanced several statutory interpretation arguments asserting that the severance cap should not cover a constructive dismissal scenario:
- Distinct Legal Concept: She contended that constructive dismissal is legally distinct from a straightforward “termination without cause.” Because the PSA’s wording of section 25.01 refers only to employees “terminated without cause” and does not mention constructive dismissal, the Legislature did not clearly include constructive dismissals within the cap. In her view, when limiting legal rights, the Legislature must speak expressly; the absence of the term “constructive dismissal” in s. 25.01 signaled no intent to curtail common-law damages for such claims.
- Presumption of Consistent Expression: Twilley pointed out that different language is used in different sections of the PSA. Notably, s. 25.03 explicitly uses the term “constructive dismissal” (to say the new law itself isn’t one), whereas s. 25.01 does not. Under the interpretive presumption that the Legislature uses consistent terms to mean the same thing, this difference suggested that s. 25.01’s cap might exclude constructive dismissals (since if the cap were meant to cover them, the statute would presumably have said so, as it did in s. 25.03).
- Beneficial/Remedial Interpretation: She argued the PSA (being part of public employment standards) is a benefits-conferring or remedial legislation, so any ambiguity should be resolved in favour of the employee. Twilley noted the heading of s. 25.01 is “Notice of termination and severance pay,” which she claimed implies the provision was intended only for actual terminations, not the different situation of a constructive dismissal. Thus, she urged a narrow reading of the cap in a way that preserves employees’ common-law rights in constructive dismissal cases.
Court’s Analysis and Reasoning
The Court rejected Twilley’s interpretation and held that the statutory cap does apply to constructive dismissal claims, for two main reasons:
- Constructive Dismissal = Termination Without Cause: The Court concluded that constructive dismissal is not a wholly separate legal creature, but rather “a form or type of termination without cause.” When an employer unilaterally makes fundamental changes to a contract (forcing an employee to quit), the law deems it a termination by the employer, just as if the employer had expressly fired the employee without cause. In both an ordinary without-cause firing and a constructive dismissal, the same damages arise – namely, the employee’s right to reasonable notice or pay in lieu. The Court noted that “these are the exact same damages that arise in constructive dismissal”, i.e. compensation for lack of notice.
- Clear Legislative Intent to Cap All No-Cause Terminations: The Court found that the Legislature did speak sufficiently clearly to limit common-law notice in all no-cause terminations. Section 25.01(3) explicitly applies “notwithstanding any right existing at common law,” evidencing clear intent to abrogate common-law entitlements for any termination without cause (which, as established, includes constructive dismissals). In the Court’s view, the absence of the words “constructive dismissal” in s. 25.01 was not meant to exclude it, but simply reflected that s. 25.01 was phrased in broad, generic terms (“terminated without cause”) while s. 25.03 served a different purpose. Section 25.03 – by declaring the new severance regime is not itself a constructive dismissal – aligns with the amendment’s fiscal purpose and does not imply that other constructive dismissals lie outside the cap. The Court emphasized that reading the severance cap to exclude constructive dismissals would undermine the very aim of the 2019 changes. The legislative purpose was to limit severance liability and provide predictability in public sector termination costs. A “plain and ordinary reading of s. 25.01 in the context of the entire statute” showed an intent to cap the employer’s severance exposure and promote fiscal predictability. Carving out constructive dismissals from that cap would be illogical and inconsistent with that intent, effectively creating an unwarranted gap in the statutory scheme. The Court concluded that “leaving out constructive dismissal from the cap on termination pay is not logical or consistent with [the legislative] intent and purpose and would create a gap in the statutory scheme.”
In sum, the Court held that the 2019 PSA amendments were meant to comprehensively limit severance notice/pay for all forms of termination without cause, and a constructive dismissal is simply one variant of such termination. The statutory language, purpose, and context all pointed to the cap applying equally to Twilley’s claim.
Outcome and Key Takeaways
The Court ultimately dismissed Twilley’s application, holding that Alberta’s severance cap does apply to constructive dismissals in the public sector. This outcome means that non-unionized public employees who claim constructive dismissal cannot circumvent the PSA’s limit of four weeks’ pay per year of service (up to 78 weeks maximum). They are restricted to the same maximum notice/severance as if they had been explicitly terminated without cause.
Key legal doctrines affirmed in this case include:
- Constructive Dismissal: It is not a unique cause of action separate from wrongful dismissal; it is treated as a branch of termination without cause at common law, yielding the same remedies (reasonable notice or pay in lieu). Employers who fundamentally breach employment terms are deemed to have terminated the employee.
- Statutory Interpretation: The Court applied the modern approach, looking at text, context, and purpose. It stressed that the Legislature can extinguish common-law rights if it does so clearly – here using phrases like “notwithstanding any right existing at common law” to plainly limit severance entitlements. The decision also illustrates interpretive presumptions: the use of different terms in related provisions (s. 25.01 vs s. 25.03) was reconciled by examining each section’s role and the statute’s overall intent, rather than reading in an inconsistency. A purposive interpretation prevailed: given the fiscal objective of the 2019 law, the Court read the provisions in a way that closed loopholes (ensuring all no-cause terminations are caught by the cap).
- Employment Law Damages: By affirming the cap’s applicability, the Court reinforced that common law reasonable notice damages can be limited by statute for certain classes of employees. Public service employees in Alberta are confined to the statutory formula for severance, even if the common law might have awarded more in a constructive dismissal. No tort or extra-contractual damages were at issue here; the claim was essentially for breach of contract (failure to give reasonable notice), and the available damages were curtailed by statute.
In summary, Twilley stands as an important precedent clarifying that Alberta’s public sector severance cap encompasses constructive dismissals. The Court’s reasoning blended classic employment law doctrine with statutory interpretation, confirming the Legislature’s power to redefine dismissal entitlements in the public sector. Absent any Charter challenge, the decision cements the principle that a constructive dismissal will be treated no differently than a direct termination when it comes to applying statutory limits on severance.
*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.