- In general, an employee's benefits should continue throughout their notice period — whether that notice is worked, or the employer chooses instead to pay the employee in lieu of having…
- Ontario's employment standards framework requires that, during the statutory minimum notice period, an employer generally must continue an employee's regular wages, benefits, and pension…
- Where an employee is entitled to more than the statutory minimum under the common-law concept of reasonable notice — because no valid, enforceable contract term limits them to the…
When you are let go from a job, your paycheque is usually the first thing on your mind — but your health, dental, and other group benefits often matter just as much, especially if you or a family member relies on them. Whether those benefits keep running during your notice period is a real legal question, not just something left to your employer's discretion.
This article explains what Ontario law generally requires, and where employers sometimes get it wrong.
The Short Answer
In general, an employee's benefits should continue throughout their notice period — whether that notice is worked, or the employer chooses instead to pay the employee in lieu of having them work it. Cutting off benefits the moment someone is told they are dismissed, without continuing them through the full notice period, is a common mistake employers make.
The details depend on whether you are talking about the statutory minimum notice period, or the potentially longer notice period you may be entitled to under common law.
The Statutory Floor
Ontario's employment standards framework requires that, during the statutory minimum notice period, an employer generally must continue an employee's regular wages, benefits, and pension contributions as if the employee had continued working normally. This is a floor, not a ceiling — it applies at minimum during the statutory notice period set out in the graduated schedule based on length of service.
What Common Law Usually Adds
Where an employee is entitled to more than the statutory minimum under the common-law concept of reasonable notice — because no valid, enforceable contract term limits them to the statutory floor — the general expectation is that benefits should also continue through that longer, common-law notice period, not just the shorter statutory one, unless a specific benefit genuinely cannot be extended (some insurance products, for example, may not be able to continue past a certain point regardless of what the employer wants).
Where a benefit genuinely cannot continue, the value of what is lost is often factored into the overall damages calculation instead.
What Typically Counts as a "Benefit" Here
- Extended health and dental coverage
- Life insurance and disability insurance coverage
- Pension or retirement plan contributions
- Other group benefits the employee received as part of their regular compensation, such as an employer-paid wellness or health spending account
Not every perk qualifies the same way — the more a benefit was a regular, expected part of compensation, the more likely it should be continued, or compensated for, during the notice period.
When Benefits Get Cut Off Early
If an employer cancels benefits immediately upon dismissal rather than continuing them through the notice period, that is not simply an administrative inconvenience — it can be a legal problem that adds to what the employer owes. This is particularly serious if the employee or a dependent had an urgent health need, a claim in progress, or coverage that could not easily be replaced, such as disability insurance, where a gap in coverage can matter enormously if a new condition arises during the gap.
Comparing Statutory and Common-Law Notice
| Statutory (ESA) minimum notice | Common-law reasonable notice | |
|---|---|---|
| Benefits continuation | Generally required through the statutory notice period | Generally expected through the full notice period, where a longer common-law entitlement applies |
| Who it applies to | All eligible employees, as a legislated floor | Employees not validly limited to the statutory minimum by an enforceable contract term |
| What happens if a benefit can't continue | Value can be compensated instead | Value can be compensated instead |
Reviewing Your Severance Package's Benefits Language
- [ ] Does the offer say when your benefits actually end, and does that match the notice period being offered?
- [ ] Were your benefits cut off immediately on your last day, before any notice period ran?
- [ ] Does the package account for the value of any benefit that could not practically continue?
- [ ] Do you have an ongoing health, dental, or disability claim that a coverage gap could affect?
- [ ] Are you being asked to sign a release before you have confirmed how benefits were actually handled?
Frequently asked questions
If I'm paid in a lump sum instead of working out my notice, do benefits still count?
Generally yes — being paid in lieu of notice does not change the underlying entitlement; the value of continued benefits during that period is still something an employer should account for, whether by continuing actual coverage or compensating for its value.
What if my employer says benefits legally have to stop the day I'm terminated?
That is often not accurate, at least for the notice period you are entitled to. Some specific insurance products do have practical limits on how long coverage can continue, but that is different from an employer simply choosing to cut everything off immediately.
Can I claim for a benefit that lapsed and cost me money, like an uncovered prescription or dental bill?
Potentially. If your benefits should have continued through your notice period and did not, out-of-pocket costs you incurred as a result can sometimes be included in what you claim.
Does this apply if I found a new job quickly?
Finding new benefits coverage through a new employer can affect the calculation, since you generally cannot recover for a loss you did not actually experience once replacement coverage is in place — but the timing and details matter, so it is worth having a lawyer review your specific situation.
This is a litigation question
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