In Ontario, charities and non-profit organizations are legally required to pay the exact same common law severance as for-profit corporations. There is no ‘charity discount’ for wrongful dismissal. Claims are filed at the Superior Court of Justice, where the basic filing fee is currently $320 CAD as of June 2026.
Working in the non-profit or charitable sector is deeply rewarding, as employees dedicate their careers to helping others and improving their communities. However, when a charity loses funding, restructures, or changes leadership, dedicated staff members are often let go abruptly. Many boards of directors operate under the mistaken belief that because they rely on donations or government grants, they do not have to pay full severance. They often try to offer departing employees only the bare minimums required by the Employment Standards Act (ESA), claiming the organization simply cannot afford more.
Ontario employment law strictly rejects this argument. 📍 Whether you work for a local food bank in Toronto, a housing shelter in Ottawa, or a global NGO headquartered in Mississauga, the legal rules are identical to those governing major banks and tech companies. A lack of funding is considered a normal business risk, and judges will not reduce your common law severance entitlements out of sympathy for the employer’s non-profit status. You are entitled to a financial bridge to help you find your next role.
Step-by-Step Process for Claiming Severance from a Non-Profit
Challenging a charity can feel emotionally difficult, especially if you believe in their mission. However, you must prioritize your own financial survival. Handling the process professionally through legal channels ensures you get what you are owed without unnecessary drama.
Step 1: Gather Your Employment Records
Before leaving the office, ensure you have copies of your original employment contract, recent pay stubs, and any communication regarding your termination. 📂 In the non-profit sector, employees often receive benefits like RRSP matching or extended health care. You need a complete record of your total compensation, as common law severance is based on your entire package, not just your base salary.
Step 2: Do Not Accept the ‘Lack of Funds’ Excuse
The board of directors or executive director may sit you down and plead poverty, asking you to sign a release in exchange for a few weeks of pay. Do not sign it. Signing that release legally prevents you from seeking the 6 to 24 months of pay you might actually be entitled to under common law. Take the paperwork home for review.
Step 3: Work with an Employment Lawyer
Consult a local Ontario employment law firm to review your termination package. They will calculate your true entitlements based on your age, length of service, and the difficulty of finding a similar non-profit role. ✉️ Your lawyer will then draft a respectful but firm demand letter to the board of directors, reminding them of their fiduciary and legal duties to pay proper severance.
Step 4: Filing at the Superior Court of Justice
Charity boards are usually very sensitive to bad public relations and lawsuits. If they refuse to negotiate, your lawyer will issue a Statement of Claim at the Superior Court of Justice. The prospect of explaining to donors why they are spending money on a doomed legal battle rather than settling fairly usually forces non-profits to offer a proper severance package quickly.
Severance Reality: Non-Profit vs For-Profit
| Employment Standard | Non-Profit Employer’s Claim | Legal Reality in Ontario |
|---|---|---|
| Common Law Severance | “We only have to pay ESA minimums because we are a charity.” | False. Charities owe the exact same common law notice (up to 24 months). |
| Lost Government Grant | “Our funding was cut, so the contract is frustrated.” | False. Losing a grant is a normal business risk, not legal frustration. Severance is owed. |
| Fixed-Term Contracts | “Your 1-year contract ended, so no severance is owed.” | If renewed multiple times, courts treat it as permanent employment, triggering severance. |
How Much Does it Cost in Ontario?
You do not need to drain your savings to stand up to a board of directors. The legal system is built to assist recently terminated workers.
- Court Filing Fees: Initiating a wrongful dismissal claim at the Superior Court of Justice requires a standard filing fee of $320 CAD (as of June 2026).
- Lawyer Fees: Most employment lawyers will represent you on a contingency fee basis. This means you pay zero upfront costs, and the law firm takes a percentage (typically 25% to 33%) of the final settlement.
How Long Does the Process Take?
Non-profits usually want to resolve employment disputes quietly and quickly to avoid donor scrutiny. Once your lawyer sends a compelling demand letter, a fair settlement can frequently be reached in 2 to 4 months. If the board is stubborn and the case must proceed through the civil court system, it may take 12 to 18 months.
Frequently Asked Questions (FAQ)
Can board members be held personally liable for my severance?
Generally, board members of incorporated non-profits are protected from personal liability for common law severance. However, under the ESA and corporate laws, directors can sometimes be held personally liable for unpaid wages and vacation pay if the charity goes bankrupt.
What if the non-profit officially files for bankruptcy?
If the organization formally files for bankruptcy, obtaining common law severance becomes very difficult, as you become an unsecured creditor. However, you may be eligible to recover some unpaid wages and statutory severance through the federal Wage Earner Protection Program (WEPP).
Are unionized non-profit workers covered by these rules?
No. If you belong to a union (which is common in the social services sector), you cannot sue in civil court for wrongful dismissal. Your severance and layoff rights are strictly governed by your Collective Bargaining Agreement (CBA), and you must file a grievance through your union representative.
Does my severance get reduced if I find a job in the private sector?
Yes. Under the duty to mitigate, if you secure a new job (whether in the non-profit or for-profit sector) during your common law notice period, whatever you earn at the new job is typically deducted from the severance your former employer owes you.
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