What to do when your employee’s pay structure is complicated

Dan Wilband

A recent Alberta Court of King’s Bench decision offers valuable lessons for employers dealing with long-term employees who’ve had unpredictable pay arrangements (2025 ABKB 485).

The case involved an employee with 24 years of service at a company that was eventually sold to new owners. Despite a highly irregular compensation history - she had no T4 slips for several years, accepted artwork in lieu of salary in 2017, and went without any pay in 2016 and 2017 - she successfully argued for 18 months’ notice after termination. The lower tribunal had initially awarded only 6 months based on finding she was merely a “casual” employee, but the appeal judge disagreed.

The key point: the court looked beyond the sporadic pay to examine the employee’s actual role and responsibilities. Despite the unusual compensation history, the employee held integral positions including compliance officer and registered representative - roles essential to the business. The court found these core responsibilities were inconsistent with “casual” employment, regardless of how she was paid.

Two important clarifications emerged: first, part-time status isn’t a relevant factor when determining reasonable notice periods - it only affects how damages are calculated. Second, when a business is sold as a going concern, employees receive credit for their full years of service with the previous owner, meaning the purchasing company inherited the full employment history.

This case highlights how courts examine the totality of the employment relationship, including job duties, integration into operations, and regulatory requirements. When employment arrangements lack clear documentation, uncertainty often gets resolved in the employee’s favour.

The opportunity here? Well-drafted employment contracts and proactive legal guidance provide clarity and predictability, helping employers manage their obligations effectively while avoiding costly surprises down the road.