Effective August 1, 2023, the civil claims limit in Alberta will increase to $100,000 from $50,000 – making it more likely that employers will have to defend allegations of wrongful dismissal in small claims court.
The civil claims process, commonly known as small claims, is an expeditious procedure terminated employees may use to commence a wrongful dismissal claim. It is a plaintiff-friendly process easily commenced without a lawyer. Unlike the higher court process, there is limited document production with a civil claim and no questioning of the parties. This prevents an employer from testing the evidence presented by a terminated employee prior to trial.
In the Court of King’s Bench, the plaintiff must navigate a complex process and usually requires the assistance of legal counsel. The plaintiff also has the onus to advance the claim through the litigation process. In a civil claim, the court will schedule mandatory alternative dispute resolution and move the matter to trial. The process is much less complex and a lawyer is not required.
Implications for employers
Employers generally prefer to defend a claim in the Court of King’s Bench. The increased civil claim limit will likely result in a greater number of terminated employees with claims between $50,00 and $100,000 advancing civil claims upon termination. While this may result in a less costly and a quicker resolution, the procedural advantages of the Court of King’s Bench will be lost to employers.
Now more than ever, employers should require employees to sign an enforceable contract that will strictly limit the amount an employee may claim upon termination. Employers should ensure that the terms of the employment contract are sufficient to limit the employee’s claim at or near statutory minimums.
The lawyers in the MLT Aikins Labour & Employment group have wide-ranging experience advising employers across Western Canada on defending claims and complying with their legal obligations to employees. If you have any questions about what the new small claims limit will mean for your organization, contact us to learn more.
Note: This article is of a general nature only and is not exhaustive of all possible legal rights or remedies. In addition, laws may change over time and should be interpreted only in the context of particular circumstances such that these materials are not intended to be relied upon or taken as legal advice or opinion. Readers should consult a legal professional for specific advice in any particular situation.