In Ontario, your severance package must legally “make you whole.” This means you are entitled to the cash value of all lost perks-such as employee discounts, car allowances, gym memberships, and transit passes-for the entire duration of your common law notice period.
Understanding the True Value of Your Compensation Package
When calculating what a job is worth, base salary is only part of the equation. 💼 For many workers in Ontario-such as retail managers in Mississauga, airline staff in Toronto, or telecom employees in Ottawa-exclusive corporate perks are a massive financial benefit. An airline worker might rely on free flights to visit family, while a telecom employee saves thousands a year on free internet and mobile plans. When an employer terminates you, they usually cut off these perks on your last day of work.
Under Canadian employment law, a wrongful dismissal occurs when an employer fails to provide adequate reasonable notice. 📍 During this “notice period,” you are legally supposed to be kept in the exact same financial position as if you were still working. This means the employer cannot just pay you your base salary; they must also compensate you for the monetary value of your lost employee discounts, RRSP matching, and health benefits. Failing to include these in your severance offer means you are being underpaid.
Step-by-Step Process to Claim Lost Perks in Ontario
Employers intentionally “forget” to include the value of perks in their initial severance offers, hoping you will not notice. 📝 It is entirely up to you and your legal team to demand compensation for these lost benefits. Here is how to build a strong case for maximum severance.
Step 1: Inventory and Quantify Your Perks
Before speaking to a lawyer, make a detailed list of every benefit you received. 💻 Calculate how much you saved historically. For example, if you used your 40% employee discount to save $3,000 CAD on groceries or electronics over the past 12 months, you must document this. Print out past receipts, benefit statements, and corporate policy documents.
Step 2: Review the Employer’s Severance Offer
Examine the termination letter carefully. 📄 Most lowball offers only multiply your base weekly salary by a few weeks. If the offer strictly excludes your car allowance, cell phone reimbursement, or the cash equivalent of your staff discount, do not sign the release document. Signing it legally waives your right to claim these missing funds.
Step 3: Hire an Employment Lawyer
Because valuing perks can be complex, you need an experienced Ontario employment lawyer. 👥 They will calculate your full common law entitlement, which could be up to 24 months. If your notice period is deemed to be 10 months, your lawyer will demand 10 months of base salary PLUS 10 months’ worth of the cash value of your lost discounts and allowances.
Step 4: Send a Demand Letter or File a Lawsuit
Your lawyer will formally demand the inclusive amount. ⚖ Often, employers will recognize the legal reality and settle out of court. If they refuse to value the perks fairly, your lawyer will issue a Statement of Claim at the Superior Court of Justice (or Small Claims Court if the total dispute is under $35,000 CAD).
How Much Are Legal Fees to Recover Severance?
Pursuing the true value of your compensation should not drain your wallet. 💰 As of May 2026, Ontario lawyers utilize structures to ensure you can fight back without upfront financial risk.
| Fee Structure | Average Cost in Ontario (CAD) | When It Is Used |
|---|---|---|
| Contingency Fee | 25% to 35% of the total settlement | If your lawyer negotiates a higher package covering all lost perks, they take a percentage of the win. |
| Contract Review Flat Fee | $300 to $600 CAD | If you just want a lawyer to read your severance offer and tell you what perks are missing. |
| Court Filing Fees | $228 CAD | The mandatory provincial fee to file a civil lawsuit at the Superior Court of Justice. |
How Long Does the Process Take?
Negotiating the value of specific perks is usually a matter of basic math and legal precedent. 🕎 If the employer is rational, a lawyer’s demand letter can secure a revised, comprehensive settlement within 4 to 8 weeks. However, if the company stubbornly argues that the perks were “discretionary” and worth nothing, pushing the case through mediation in the Ontario court system can take 12 to 18 months.
Frequently Asked Questions (FAQ)
Does the Employment Standards Act (ESA) cover lost perks?
The Ontario ESA strictly requires employers to continue your regular wages and your standard benefit plans (like health and dental) during the statutory minimum notice period (up to 8 weeks). However, claiming the cash value of unique perks like travel discounts or car allowances for longer periods relies strictly on common law principles.
What if my employment contract says perks end upon termination?
Many employers try to insert language stating that discounts or bonuses stop the day you are fired. In Ontario, courts often strike these clauses down unless they are drafted with absolute, legally perfect precision. Always have a lawyer review the exact wording before giving up.
Do I get compensation for lost RRSP matching?
Yes. If your employer matched your RRSP contributions (e.g., up to 5% of your salary), you are entitled to the cash equivalent of those lost employer contributions for the entire duration of your common law reasonable notice period.
Are payouts for lost perks taxable?
Yes. When a settlement includes compensation in lieu of lost perks, it is generally bundled into your overall severance package. The Canada Revenue Agency (CRA) classifies this entire amount as a “retiring allowance,” which is subject to standard income tax deductions.
You worked hard to earn your full compensation package, and an employer cannot just erase it when you are fired. If you have been let go in Ontario and your severance offer ignores your valuable employee perks, browse our directory to find a skilled employment lawyer who will demand what you are truly owed.
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