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Should a Company Car Benefit Be Factored into a Severance Package?

Should a Company Car Benefit Be Factored into a Severance Package?

Getting let go from your place of employment is never a welcome surprise and will often impact your life in many ways. If you are an employee who has access to a company car that can be utilized for personal use, your loss of employment might also result in a loss of transportation. It is only reasonable that your employer will ask for a company car to be returned after your employment has been terminated. Yet, how does this inconvenience impact potential severance benefits?

In a recent Globe and Mail article, Rahul Soni of Soni Law Firm addressed this question from a reader who wanted to know if they should receive compensation in their severance package relating to the use of the company car. In this case, the employee was permitted to use the company car for personal use if they paid a fee. When their employment was terminated, they were required to return the company car immediately and after years of not owning a personal vehicle, were concerned about needing to purchase one.

How Long Should an Employee Have Access to a Company Car After Being Laid Off?

When it comes to knowing how long an employee should have access to a company vehicle it depends on a few factors. In most cases, company vehicles are not to be accessed for personal use and in these cases, having to return the company car immediately after termination makes sense. However, if the use of a company car for personal travel is a benefit of employment, such as in the case of the reader of the Globe and Mail, the answer gets a bit more complicated. In the Globe and Mail article, Soni states,

In Ontario, the Employment Standards Act requires that all your benefits, including vehicle access, must be continued for your minimum notice period under the statute. If you worked for more than three months, your employer is obligated to continue your vehicle access for one to eight weeks, depending on your years of service. Your vehicle access benefit continuation could be significantly longer if you are owed common law notice.

If you have been laid off from your place of employment and are concerned that your employer has not fulfilled their obligation to continue benefits for your minimum notice period, you may want to speak with a severance lawyer. In the case of being asked to return the company vehicle immediately, you could be eligible to receive compensation for the value of the benefit such as the cost of a rental vehicle.

Every employee-employer relationship is unique, and when looking to determine if your rights as an employee are being respected, speaking with an employment lawyer is always a good choice. If you have concerns about your severance package or have questions relating to the unique aspects of your employment, the experts at Soni Law Firm can help. Contact us today to book a free consultation.

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About Post Author


Rahul founded Soni Law Firm, a boutique employment, labour, and human rights law firm, with the goal of taking his Downtown Toronto litigation experience and making it accessible to Ontario’s Main Street employees and employers.