This answer comes from our payroll expert, Alan McEwan, to whom I referred your Q. I hope it helps. Glenn
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The real issue here is when will the employment end? At the end of the “salary continuance” or a when separation agreement is reached.
This decision has both source deduction and Record of Employment reporting consequences.
The simplest thing is to treat the 1-year period as inactive employment, i.e. the person is getting paid what they would, but is not expected to work.
The year would constitute the notice period, no termination pay would be owing and an ROE would only be issued at the end of the year.
The downside of this is that the person would still be an employee, entitled to benefits, including potentially vacation pay.
If the employer wishes to severe the employment relationship immediately, then yes, the termination pay owing under the Alberta employment standards would have to be paid as a lump sum within 10 days. However, the “salary continuance” would be a series of retiring allowance payments, meaning no CPP, no EI and no benefits. A single ROE could be produced showing the sum of the retiring allowance payments to be made over the year in Block 17.