It is a rare employer who is not aware of its employees’ entitlement to reasonable working notice of termination (or pay in lieu thereof). At the same time, it also seems to be a rare employer which has a full grasp of the other costs which can arise upon termination.
That is perhaps because most employees who are terminated (on a without cause basis) are owed little more than some pay in lieu of notice at the time of termination. A smaller category of employees has a range of other entitlements and these can be quite valuable.
The reason for these other entitlements arises out of the law of wrongful dismissal. It requires an employer to provide reasonable working notice of termination and, during that notice period, to maintain all existing terms and conditions of employment.
If the employer decides to terminate abruptly (without working notice), its obligation is to put the employee in the position he or she would have been in had the working notice been given. In many cases, that simply amounts to paying out wages equivalent to what the employee would have earned during the working notice period.