What Happens to My SERP and Deferred Compensation When I Am Terminated in Ontario?

If you are a senior manager or executive, the severance offer in front of you was almost certainly built from base salary and a number of months. Your SERP, your deferred bonus and your notional units were probably not priced at all, and the dates that govern them were probably not looked at. That is not an oversight you should correct for the employer quietly. It is usually the single largest gap between what you were offered and what you are owed.

What exactly is a SERP, and why does "unregistered" change everything?

A SERP is a promise by your employer to pay you retirement income above what a registered pension plan is permitted to deliver. Federal tax rules cap the annual benefit a registered plan may pay, and once your earnings pass a certain level that cap bites hard. The SERP is the top-up. It lives outside the registered plan, and that single fact drives everything else.

Because the SERP sits outside the registered plan, the funding, solvency and locking-in machinery that protects a registered pension generally does not protect it. There is usually no separate pot of money with your name on it. In most Ontario SERPs, what you actually hold is a contractual right to be paid, ranking alongside the employer's other unsecured obligations. Some employers secure the promise with a letter of credit or fund it through a retirement compensation arrangement trust. Many do not, and the documents do not always make that obvious.

SERPs come in three broad shapes, and you need to know which one you have before anything else in this article is useful to you:

• The defined benefit top-up. The plan promises a total pension calculated on a formula (for example 2 per cent of final average earnings for each year of service), then deducts whatever the registered plan will pay and promises the difference. Every variable in that formula is a lever: years of service, the definition of final average earnings, and whether bonus is included in earnings.
• The notional account. The employer credits a percentage of your pay to a bookkeeping account each year, credits notional investment returns, and promises the balance at retirement. There is often no real account and no real investment.
• The flat promise. An individual agreement, sometimes a single paragraph in a letter, promising a fixed annual amount from a stated age. These are frequently the most poorly drafted and, for that reason, frequently the most defensible from an employee's side.
• Deferred compensation that is not a pension at all. Deferred bonus, deferred share units, phantom units, notional share plans and multi-year cash LTIP awards. These are governed by the same analysis but different plan wording, and they usually pay out much sooner.

The practical consequence of "unregistered" is that your protection is contract law, not pension regulation. That sounds worse than it is. Contract law in Ontario has been notably unfriendly to employers who try to strip executives of deferred compensation on the way out the door.

Is my SERP "wages" under the Employment Standards Act, or a "benefit plan"?

It is usually a "benefit plan," and that matters in both directions. Section 1 of the Employment Standards Act, 2000 defines "benefit plan" as "a benefit plan provided for an employee by or through his or her employer." A SERP provided by your employer falls squarely inside that. The definition is deliberately wide and does not require the plan to be registered, funded or even written down as a formal plan.

Now walk the definition of "wages" in s. 1, because every limb does work here. "Wages" means:

• (a) "monetary remuneration payable by an employer to an employee under the terms of an employment contract, oral or written, express or implied";
• (b) "any payment required to be made by an employer to an employee under this Act"; and
• (c) "any allowances for room or board under an employment contract or prescribed allowances,"
• but does not include (d) tips or other gratuities; (e) "any sums paid as gifts or bonuses that are dependent on the discretion of the employer and that are not related to hours, production or efficiency"; (f) expenses and travelling allowances; or (g) "subject to subsections 60 (3) or 62 (2), employer contributions to a benefit plan and payments to which an employee is entitled from a benefit plan."

Limb (g) is the one that removes a SERP payment from the definition of "wages." The consequences are concrete. Because SERP payments are not wages, they are not "regular wages," so they do not increase the weekly figure that drives your statutory severance pay calculation under s. 65(1), and they are not part of the weekly payment the employer must make under s. 60(1)(b). But notice that limb (g) is expressly "subject to subsections 60 (3) or 62 (2)," and s. 60(3) is where the employer's failure to maintain the plan is converted back into unpaid wages. The Act takes the SERP out of wages for the purpose of calculating minimums, then puts it back in for the purpose of enforcement.

Limb (e) deserves separate attention because employers misread it constantly. To take a bonus out of "wages," both conditions must be met: it must be dependent on the employer's discretion and unrelated to hours, production or efficiency. A bonus with a formula tied to revenue, EBITDA, production volume or individual targets is related to production or efficiency, so it stays inside "wages" even if the plan calls it discretionary. In Bain v. UBS Securities Canada Inc., 2018 ONCA 190, the Court of Appeal confirmed that vacation pay is calculated on a bonus tied to production. If your bonus is formula-driven, check whether vacation pay was paid on it, because on a six-figure bonus over several years that alone can be a substantial number.

There is one more nuance worth raising with counsel. If your SERP is not a "plan" at all but a flat promise in your individual employment agreement, there is a real argument it is "monetary remuneration payable by an employer to an employee under the terms of an employment contract" under limb (a), and therefore wages after all. Which characterisation helps you depends on what you are trying to do, and it is worth deciding deliberately rather than by accident.

What does the ESA require during the statutory notice period, limb by limb?

It freezes your terms of employment and requires the employer to keep funding your plans, and it does so absolutely. This is a statutory floor, not a bargaining position. Section 60(1) provides that during a notice period under s. 57 or s. 58, the employer:

• (a) "shall not reduce the employee's wage rate or alter any other term or condition of employment";
• (b) "shall in each week pay the employee the wages the employee is entitled to receive, which in no case shall be less than his or her regular wages for a regular work week"; and
• (c) "shall continue to make whatever benefit plan contributions would be required to be made in order to maintain the employee's benefits under the plan until the end of the notice period."

Section 60(2) covers the executive who has no regular work week or is paid other than by time: the employer must pay "an amount equal to the average amount of regular wages earned by the employee per week for the weeks in which the employee worked in the period of 12 weeks immediately preceding the day on which notice was given." Section 60(3) provides that a failure to contribute contrary to clause (1)(c) means "an amount equal to the amount the employer should have contributed shall be deemed to be unpaid wages for the purpose of section 103," which is the collection machinery. And s. 60(4) confirms that nothing in s. 60(3) "precludes the employee from an entitlement that he or she may have under a benefit plan," so the statutory remedy sits on top of your contractual claim rather than replacing it.

Most executives are paid in lieu rather than given working notice, so s. 61 is the operative section. Under s. 61(1) the employer may terminate without notice if it (a) "pays to the employee termination pay in a lump sum equal to the amount the employee would have been entitled to receive under section 60 had notice been given in accordance with that section" and (b) "continues to make whatever benefit plan contributions would be required to be made in order to maintain the benefits to which the employee would have been entitled had he or she continued to be employed during the period of notice." Section 61(1.1) applies the 12-week averaging rule to the period immediately preceding the date of termination. Section 61(2) deals with mass termination notices under s. 58 and will only matter to you if you were part of a group.

Read clause 61(1)(a) carefully. It imports the whole of s. 60, including clause 60(1)(a), the freeze on altering "any other term or condition of employment." That is the reasoning the Court of Appeal adopted in Wigdor v. Facebook Canada Ltd., 2026 ONCA 572, a recent decision from August 2026, where clauses ending equity vesting on termination were held void because ESA s. 60(1)(a), read into s. 61(1)(a), forbids altering any term or condition of employment during the statutory notice period. The RSUs at issue were worth roughly US$4.7 million and would have vested during a ten-month notice period. Because it is recent, do not treat it as settled beyond doubt, but the argument travels directly to a SERP: a plan clause that stops accrual or triggers forfeiture on your last day is an alteration of a term or condition of employment, and for the statutory notice period at least, s. 5(1) says it cannot be done.

Section 5 closes the loop. Section 5(1): "no employer or agent of an employer and no employee or agent of an employee shall contract out of or waive an employment standard and any such contracting out or waiver is void." Section 5(2) is the greater-benefit rule: where a contract provision "directly relate[s] to the same subject matter as an employment standard" and provides a greater benefit, the contract applies instead. So a SERP that is more generous than the statutory floor governs; one that is less generous is void to that extent. Your sophistication as an executive does not change this. Rahman v. Cannon Design Architecture Inc., 2022 ONCA 451 held that an executive's sophistication and independent legal advice do not save a termination clause that offends the ESA.

Does the notice period move my service, my age and my eligibility dates?

Yes, for the purpose of measuring damages, and this is the most valuable paragraph in this article. Taggart v. Canada Life Assurance Company, 2006 CanLII 53345 (ON CA) holds that the pension accrual that would have occurred during the notice period is recoverable as damages. The employer argued that accrual was limited to "active service" and pointed to a clause saying plan benefits "shall not be used to increase damages." Neither was clear enough to remove the common law right.

The point that executives miss is that this is not only about the extra months of accrual. It is about the thresholds you would have crossed. In Taggart the extra service mattered because it carried the employee toward an unreduced pension at thirty years of service. Most SERPs and most defined benefit plans contain at least one cliff: an unreduced pension at a stated age, or at a stated number of years of service, or at a points threshold combining the two. A bridge benefit may switch on. A vesting condition may be satisfied. Cross the line and the benefit steps up permanently; miss it by four months and you take a percentage reduction for the rest of your life.

The governing framework is Matthews v. Ocean Nutrition Canada Ltd., 2020 SCC 26. First, would you have been entitled to the benefit as part of your compensation during the reasonable notice period. Second, if so, does the plan wording unambiguously remove that common law right. A SERP clears step one easily, because it is granted by service and earnings rather than by discretion. The fight is at step two, and step two is a reading exercise, not a fairness exercise.

Be precise about what you are claiming. You are not asking the plan administrator to credit you with service you did not work; a registered plan usually cannot do that. You are asking the employer to pay the difference in value between the entitlement you hold at your termination date and the entitlement you would have held at the end of the notice period. Do not accept the argument that because the administrator cannot credit the service, nothing is owed. The administrator's inability to credit it is precisely why the employer pays cash.

What does a forfeiture or "bad leaver" clause in a SERP actually do when I am dismissed without cause?

Usually far less than the employer claims. A forfeiture clause has to survive step two of Matthews, which means it must unambiguously remove the common law right to damages, not merely describe when the plan pays. Ontario appellate courts have repeatedly held that "active employment" and its cousins do not clear that bar, and a "bad leaver" definition that simply lists dismissal is usually no better.

Start with the word "terminated." In Lin v. Ontario Teachers' Pension Plan, 2016 ONCA 619, where short and long-term incentive plans made up roughly 60 per cent of the executive's pay and said there would be no bonus if the employee was terminated prior to payout, the Court of Appeal treated that as an active-employment clause that did not bar damages, and held that "terminated" in such a plan means lawfully terminated. An employer that dismissed you without reasonable notice did not lawfully terminate you, so on that reading the clause is not triggered at all. Lin is also the case to read if the employer alleged cause: the cause allegation failed on a single lapse, and the notice period was set at fifteen months, at the top of the range, precisely because a cause allegation made under an ethical cloud impedes re-employment.

Then look at how your SERP defines a "good leaver." The typical drafting gives full benefits to someone who retires, dies, becomes disabled or leaves with the board's consent, and cuts benefits for everyone else. Three questions decide your case. Does the definition treat a without-cause dismissal as a good leaver event, or is it silent? If it is silent, silence is ambiguity and ambiguity defeats the clause under Matthews. Second, does "retirement" turn on reaching an age or on the employer's consent? A retirement definition keyed to an age you would have reached during the notice period is a Taggart argument. Third, does the plan reserve a discretion to the board or a committee to redesignate you? A discretion that is exercised only after you are dismissed, and only to reduce what you are owed, is vulnerable.

Finally, check whether the forfeiture wording was ever actually part of your contract. In Lin, forfeiture amendments the employees had refused to sign never became part of the contract. Employers circulate revised plan documents by email and treat them as binding. Look for what you signed, when, and what you were given in exchange. See our guides on good leaver and bad leaver definitions and bonus plan amendments you never signed.

Can a non-compete condition inside my SERP cost me the whole benefit?

It can be asserted, and it should be challenged. Many SERPs make continued payment conditional on not competing, not soliciting, or not joining a named list of competitors, sometimes for years after you leave. These clauses are drafted to be self-executing: the employer simply stops paying and leaves you to sue. Do not let the practical burden of that persuade you the clause is good.

Ontario law on restrictive covenants is restrictive of employers. Elsley v. J.G. Collins Insurance Agencies Ltd., [1978] 2 SCR 916 holds that a covenant in restraint of trade is enforceable only if it is reasonable in the interests of the parties and the public, and a non-competition covenant will not be upheld where a non-solicitation covenant would adequately protect the employer. Shafron v. KRG Insurance Brokers (Western) Inc., 2009 SCC 6 holds that courts will not rewrite an overbroad covenant to make it enforceable. If your SERP conditions payment on a restraint that is broader in scope, geography or duration than the employer's legitimate interest requires, the argument is that the condition falls with the restraint.

Two qualifications you should know in advance. First, a forfeiture condition is not identical to an injunction; the employer is not asking a court to stop you working, it is declining to pay. Courts have sometimes been more tolerant of conditions attached to a voluntarily accepted benefit than of outright restraints, and this is genuinely contested ground. Second, Ontario's statutory prohibition on non-compete agreements contains an exemption for executives, so if you hold a title such as chief executive officer, president, chief financial officer or an equivalent, you will usually have to rely on the common law rather than the statute.

The strongest employee argument is the one specific to your situation: you did not leave. You were dismissed. A condition designed to discourage an executive from walking out the door to a competitor reads very differently when applied to an executive the employer pushed out and who must now mitigate by finding comparable work, which by definition means work in the same industry. The mitigation duty in Evans v. Teamsters Local Union No. 31, 2008 SCC 20 requires you to look for comparable employment; a clause that forfeits your retirement income for doing exactly that is in obvious tension with it. See are non-compete agreements enforceable in Ontario and non-solicitation agreements.

How is deferred compensation that is not a pension treated?

Under the same two-part Matthews test, but the outcomes differ because the plan wording differs and because ownership differs. The single most important distinction Ontario law draws is between compensation the employer granted you and property you bought with your own money. Get that distinction right and most of the rest follows.

Three practical notes on that table. Bain matters more than its length suggests: the employer there relied on the word "employees" and a plan disclaimer, and neither was held to unambiguously exclude a dismissed executive. Singer v. Nordstrong Equipment Limited, 2018 ONCA 364 confirms that bonus damages run over the whole notice period and that benefits are valued at replacement cost, with no need to prove an actual out-of-pocket loss. And Love v. Acuity Investment Management Inc., 2011 ONCA 130 is the cautionary case: a senior vice president won nine months despite only two and a half years of service, because character of employment and equity participation make comparable work harder to find, but his share buy-back was triggered at the termination date rather than the end of the notice period on that agreement's wording. Wording decides.

Which clause wordings have actually defeated an executive's claim, and which have not?

Almost none of the ordinary ones. Ontario appellate courts have run through the standard drafting repeatedly and struck most of it down. The wording that has survived tends to share one feature: it either attaches to property the employee bought, or it addresses the loss of the right to damages in express terms rather than describing employment status.

If a termination clause in your employment agreement is void under Waksdale, the effect is not that you fall back to the statutory minimum. Machtinger v. HOJ Industries Ltd., [1992] 1 SCR 986 holds that where the contractual notice provision is invalid, the common law implied term of reasonable notice revives. For an executive, that is the difference between eight weeks and, potentially, two years. See signs your termination clause is unenforceable and executive severance cap clauses.

What happens to my SERP if the company is sold or becomes insolvent, and how do I find out whether it is funded?

This is the question a wrongful dismissal claim does not answer for you, and it is the one you should ask first if your employer is under financial pressure or in a sale process. A judgment for a SERP is worth what the employer can pay. If the promise is unsecured, you rank as a general creditor, and a lump sum settlement today may be worth far more than a larger paper entitlement payable over twenty years.

Find out, in writing, which of these applies to you. Ask for the document, not the answer:

• Unsecured book reserve. The employer records a liability and nothing else. This is the most common and the most exposed.
• Retirement compensation arrangement trust. Funds are held in a trust with a refundable tax account. Ask who the trustee is, what the current balance is, and whether the trust is for you specifically or for a group.
• Letter of credit. A bank guarantees payment up to a stated amount. Ask for the face amount, the expiry date and whether it renews automatically, because a letter of credit that lapses before your benefit is paid protects nothing.
• Insured or annuity-backed. Less common, but ask, and ask whether the annuity is in your name.
• Change of control provisions. Many SERPs accelerate vesting, require the purchaser to assume the plan, or require immediate funding on a change of control. If your dismissal followed a transaction, read this section before anything else in the plan.
• Successor employer language. Where your employment continued through a sale, service continuity matters. In Wigdor v. Facebook Canada Ltd., 2026 ONCA 572 the Court of Appeal confirmed that the ESA carries service across a sale of business.

One further structural point. If the entity that employed you is a subsidiary with no assets while a parent directed, paid and pooled you, you may be able to reach the parent. In Rahman v. Cannon Design Architecture Inc., 2022 ONCA 451 a parent company that directed, paid and pooled the executive was found to be a common employer. For executives whose pay ran through an international group, that finding can be the difference between a collectible judgment and a moral victory.

Can my ESA severance pay be cut because I am drawing an unreduced pension?

Yes, in one narrow and specific circumstance, and it catches executives near retirement. ESA s. 65(2.1) provides that where "an employee in receipt of an actuarially unreduced pension benefit has his or her employment severed by an employer on or after November 6, 2009, time spent in the employer's employ for which the employee received service credits in the calculation of that benefit shall not be included" in determining eligibility under s. 64(1) or in calculating severance pay under s. 65(1).

Every limb matters, and most executives are outside at least one of them. The provision requires all of the following. You must be in receipt of the benefit, which means actually being paid it, not merely eligible for it or about to elect it. The benefit must be actuarially unreduced, so a pension you took early with a reduction does not engage the subsection. The severance must have occurred on or after November 6, 2009. And the exclusion reaches only time for which you received service credits in the calculation of that benefit, so service that was never credited in the unreduced benefit, and service credited only in a SERP that is not that benefit, stays in the calculation.

Note carefully what s. 65(2.1) does not do. It reduces or removes your statutory severance pay. It says nothing about your common law reasonable notice entitlement, which is a contract claim and is not governed by this subsection at all. An employer that tells you your pension eliminates your severance entitlement is, at best, describing one line of a much longer calculation.

Work through the rest of the scheme so you know where you stand. Section 64(1) makes severance pay payable where you were employed for five years or more and either (a) the severance occurred because of a permanent discontinuance of all or part of the business at an establishment and you are one of 50 or more employees severed within a six-month period as a result, or (b) the employer has a payroll of $2.5 million or more. The two are alternatives; you need only one. Section 64(2) explains how payroll is measured: (a) total wages earned by all employees in the four weeks ending with the last completed pay period before the severance, multiplied by 13, is $2.5 million or more; or (b) total wages in the last or second-last fiscal year was $2.5 million or more. Any employer that can afford a SERP will almost always meet clause (b) of s. 64(1). Section 64(3) excludes prescribed employees, and s. 64(4) deems a location to be an establishment where there is a permanent discontinuance at the location, the location is part of a multi-location establishment, and 50 or more employees are severed within six months as a result. Subsection (4) will not apply to you unless yours was a group termination.

Section 65 then does the arithmetic. Subsection (1) multiplies your "regular wages for a regular work week" by the sum of (a) completed years of employment and (b) completed months not included in (a), divided by 12. Subsection (2) counts "all time spent by the employee in the employer's employ, whether or not continuous and whether or not active," which captures leaves and earlier stints. Subsection (2.1) is the unreduced pension exclusion just discussed. Subsection (3) applies only where employment was severed under clause 63(1)(e), the case of an employee who resigns during the employer's notice period, and will not apply to you unless you resigned after receiving notice. Subsection (4) is useful: where the employer terminates without providing the notice required under s. 57 or s. 58, severance is calculated "as if the employee continued to be employed for a period equal to the period of notice that should have been given and was not." Subsection (5) caps the entitlement at 26 weeks of regular wages, which most long-service executives will hit. Subsection (6) supplies a 12-week average for employees with no regular work week or paid other than by time, which covers most commissioned and heavily variable-pay executives.

Subsections (7) and (8) are the ones to quote back to an employer that wants to net your SERP against your severance. Subsection (7): severance pay "is in addition to any other amount to which an employee is entitled under this Act or his or her employment contract," subject only to subsection (8). And subsection (8) permits only three set-offs.

What does the extra notice actually add? A worked example.

Here is what the gap looks like in practice for a senior executive whose SERP has a service cliff. The figures below are round and illustrative, not a prediction about your case, and the notice period in any real matter turns on the factors in Bardal v. Globe & Mail Ltd., 1960 CanLII 294 (ON SC): character of employment, length of service, age, and the availability of similar employment having regard to experience, training and qualifications.

Assume a senior vice president, age 56, with 28 years and 4 months of service. Base salary $320,000. Bonus averaging $160,000 a year on a formula tied to divisional results. RSUs vesting in tranches of about $120,000. The combined registered plan and SERP promise 2 per cent of final average earnings of $400,000 for each year of service, unreduced at 30 years of service, and otherwise reduced by 5 per cent for each year short of 30. The employer offers 8 months. On the Bardal factors and the executive comparators, a claim of 22 months is defensible.

Three observations. The pension line is roughly a quarter of the difference and it is the line the offer letter did not mention. The RSU line is worth $240,000 and turns entirely on the calendar, which is why the vesting schedule is a document to read on day one; see terminated weeks before a vesting date. And the bonus figure should attract vacation pay if the bonus is tied to production, per Bain. Note also that Singer v. Nordstrong Equipment Limited, 2018 ONCA 364 values benefits at replacement cost without requiring proof of an actual loss, so you do not need to have bought private coverage to claim the line.

On the ceiling: Lowndes v. Summit Ford Sales Ltd., 2006 CanLII 14 (ON CA) holds that only exceptional circumstances support a base notice period above 24 months, and reduced a 28-year general manager aged 59 from 30 months to 24 because he was not a senior executive in the sense the case law recognises. On the other hand Dawe v. The Equitable Life Insurance Company of Canada, 2019 ONCA 512 confirms 24 months for an older, long-service senior executive, and Currie v. Nylene Canada Inc., 2022 ONCA 209 and Milwid v. IBM Canada Ltd., 2023 ONCA 702 show the range in practice. If you were recruited away from secure employment, Egan v. Alcatel Canada Inc., 2006 CanLII 108 (ON CA) and Dussault v. Imperial Oil Ltd, 2019 ONCA 448 matter to you.

What can my employer argue, and where do those arguments usually fail?

Four arguments, in roughly descending order of frequency: cause, the termination clause, mitigation, and the release you already signed or are being asked to sign. Each has a known answer.

Cause. For your ESA entitlements, common law cause is not the test. O Reg 288/01, s. 2(1) para. 3 removes notice and termination pay only from "an employee who has been guilty of wilful misconduct, disobedience or wilful neglect of duty that is not trivial and has not been condoned by the employer." That is a higher and narrower standard, requiring deliberate misconduct. Render v. ThyssenKrupp Elevator (Canada) Limited, 2022 ONCA 310 is the illustration: cause was established at common law and ESA entitlements were still owed. At common law, McKinley v. BC Tel, 2001 SCC 38 requires a contextual and proportionate analysis rather than a mechanical one, and Lin shows how a single lapse can fail to meet it. Walk the rest of s. 2(1) and you will see how little of it touches a senior executive: para. 1 (definite term or specific task, and subject to s. 2(2), which restores the entitlement where the employment ends early, where the term runs past 12 months, or where it continues three months past expiry), para. 2 (temporary lay-off), para. 4 (frustration, and under s. 2(3) not where the impossibility results from the employee's illness or injury), para. 5 (refusing reasonable alternative employment), para. 6 (refusing alternative employment under a seniority system), para. 7 (failing to return from lay-off), para. 8 (strike or lock-out), para. 9 (construction employees), para. 11 (reaching retirement age in accordance with the employer's established practice, and only if the termination would not contravene the Human Rights Code), and para. 12 (shipbuilding with a supplementary unemployment benefit plan). None of paras. 2, 6, 7, 8, 9 or 12 will apply to a salaried executive. Paragraph 11 is the one to watch if you are near a SERP retirement date, and note its built-in limit: it protects the employer only where the termination would not contravene the Code, and mandatory retirement generally does contravene it.

The termination clause. Read the cause paragraph first, not the notice paragraph. Under Waksdale v. Swegon North America Inc., 2020 ONCA 391, one offside limb voids the termination provisions as a whole, and leave to appeal to the Supreme Court was dismissed. Rahman applies this to executives with independent legal advice. Wigdor makes the point that a counsel-negotiated agreement gets no lesser standard of clarity.

Mitigation. You must make reasonable efforts to find comparable employment (Evans v. Teamsters Local Union No. 31, 2008 SCC 20), but Brake v. PJ-M2R Restaurant Inc., 2017 ONCA 402 holds that earnings from a substantially lesser job may not be deducted. For an executive, a consulting engagement at a fraction of your former compensation is often in that category. Keep a contemporaneous record of applications, recruiter contacts and interviews from week one; see the duty to mitigate.

The release. This is where SERP claims are most often lost, and lost permanently. A standard release will extinguish the SERP, the deferred compensation and any disability claim in a single paragraph. Swampillai v. Royal & Sun Alliance Insurance Company of Canada, 2018 ONSC 4023, aff'd 2019 ONCA 201 shows that a release can be set aside as unconscionable in the right circumstances, and Uber Technologies Inc. v. Heller, 2020 SCC 16 restates the modern test of inequality of bargaining power and an improvident bargain. But do not plan to litigate your way out of a release you signed. Plan not to sign it. Check specifically whether the release names the pension plan, the plan administrator and the insurer as released parties, and whether it carves out accrued pension and SERP entitlements. See should I sign the severance release.

One more the employer will not raise but you should. If the manner of your dismissal was itself egregious, Honda Canada Inc. v. Keays, 2008 SCC 39 and Wallace v. United Grain Growers Ltd., [1997] 3 SCR 701 govern damages for bad faith in the manner of dismissal, and Boucher v. Wal-Mart Canada Corp., 2014 ONCA 419 shows what aggravated and punitive damages look like where the treatment was genuinely egregious. A public cause allegation that cannot be made out is the paradigm case, and Lin priced that harm into the notice period itself.

What if I am unionized or federally regulated?

Then the route changes before the substance does, and using the wrong route can cost you the claim. Check this before you do anything else, because the limitation clocks and the forums are different.

Unionized. If your SERP or deferred compensation arises from a collective agreement, Weber v. Ontario Hydro, [1995] 2 SCR 929 gives labour arbitration exclusive jurisdiction over disputes whose essential character arises from the agreement. A court will not hear it, and the Employment Standards Act also closes the complaint route where the matter is covered by a collective agreement. Your claim runs through your union and a grievance, and the timelines in the agreement are short. Most executives are outside a bargaining unit, but not all senior managers in the broader public sector are. See rights when a unionized employee is fired.

Federally regulated. If you work for a bank, an airline, a railway, a telecommunications carrier, an interprovincial trucking company or a similar undertaking, the Employment Standards Act does not apply to you at all. The Canada Labour Code does, and its minimums, its notice formula and its severance formula are different. Wilson v. Atomic Energy of Canada Ltd., 2016 SCC 29 holds that the Code's unjust dismissal regime displaces dismissal on notice for the employees it covers, but that regime does not extend to managers, so a senior executive at a federally regulated employer is usually back to a common law wrongful dismissal claim, with the Code supplying the statutory floor rather than the ESA. Every ESA section discussed in this article should be replaced with its Code counterpart in that case. See federally regulated employee rights and unjust dismissal under the Canada Labour Code.

A discrimination angle. If you were dismissed shortly before a SERP age or service milestone and there is evidence age was a factor, that is a Human Rights Code issue. Two things to know. A Code claim cannot be brought as a standalone civil action in Ontario; either it rides inside a wrongful dismissal claim in the Superior Court, or it goes to the Human Rights Tribunal of Ontario, and the Tribunal's filing deadline is materially shorter than the civil limitation period. Choose deliberately and early. See age discrimination at work and human rights damages in employment.

What should I do next, and what documents should I gather?

Work in this order. The sequence matters because two of these steps have deadlines attached and one of them, signing, cannot be undone.

1. 1.Do not sign the release, and do not sign anything that says "acknowledgement" either. An acknowledgement of the SERP treatment or the equity forfeiture can be read as an agreement to it. If you are told the offer expires, ask in writing for an extension; the deadline is a negotiating device, not a legal rule.
2. 2.Ask for the plan documents in writing, today. Request the governing SERP text (not the summary or the member booklet), every amendment, the funding document if there is one, and a current statement of your entitlement. Put the request in an email so the date is fixed.
3. 3.Ask the employer, in writing, to state the exact words it says defeat your claim. Make it identify the clause and the plan. Employers are far less confident on paper than on a call, and the answer tells your lawyer what the fight is about in one page.
4. 4.Map your dates. Write down your age, your credited service and your continuous service as at your last day, and again as at the end of a realistic notice period. Mark every age, service and points threshold in the SERP and the registered plan, and mark every equity vesting date. This one page is the most valuable document you will produce.
5. 5.Get an actuarial number for the pension and SERP, not the employer's estimate. The difference between an entitlement at 29 years and one at 30 years is not something the HR portal will show you.
6. 6.Start and document your job search from week one, keeping applications, recruiter emails and interview dates, because mitigation will be raised and contemporaneous records defeat it.
7. 7.Do not make any irrevocable pension election (commuted value transfer, early retirement, annuity purchase) until you have advice. Some elections cannot be reversed and some of them interact badly with your claim.
8. 8.Respond in writing to any offer of alternative employment, because refusal has consequences under both O Reg 288/01, s. 2(1) para. 5 and the mitigation duty, and a considered written response is very different from silence.
9. 9.Note your limitation period. A wrongful dismissal claim in Ontario is generally subject to a two-year limitation period running from the dismissal, and a human rights application has a much shorter window. Diarise both.
10. 10.Have the whole package valued before you negotiate anything, so that the SERP and deferred compensation are on the table from your first letter rather than raised late and discounted.

Documents to gather before your first meeting with a lawyer: your employment agreement and every amendment, promotion letter and compensation letter; the SERP text, every amendment and any funding document (trust deed, letter of credit, annuity); the registered pension plan text, the member booklet, your last three annual statements and any termination option statement; the bonus plan, every plan amendment circulated to you, and evidence of what you actually received in each of the last three years; every equity and LTIP plan document with the individual grant agreements, vesting schedules and change-of-control sections; the termination letter, the offer and the draft release; payroll records for the last 24 months showing base, bonus, allowances and pensionable earnings; your record of employment; and anything in writing from either side about your retirement date or your plans.

Questions to insist on answers to, in writing: Is my bonus included in the plan's definition of pensionable or final average earnings? What is my entitlement at the termination date, and what would it be with 12 or 18 more months of service and earnings? Is the SERP vested, and if not, exactly what would vest it? Is the SERP funded or secured, and by what instrument, in what amount, and expiring when? Which good leaver category has the employer assigned me to, and under which clause? Does any forfeiture condition apply to a dismissal without cause, in express words? Does the release cover the plan, the administrator and the insurer as well as the employer, and does it carve out accrued pension and SERP entitlements?

The reason to do all of this before you respond is simple. An employer's first offer prices salary and, sometimes, benefits. It rarely prices the pension, almost never prices a threshold you were about to cross, and treats a SERP forfeiture clause as though the wording ended the conversation. Taggart, Matthews, Bain, Andros and Lin all say otherwise. If you want your own numbers measured before you sign, a free severance review will value the whole package, including the parts the offer letter left out. You may also want our companion guides on executive severance and notice periods, valuing equity vesting during the notice period, bonus entitlement when you are terminated and clawbacks of bonus and equity already paid.

About the Author

Priya Sharma

Legal Writer, Mirza Law

Priya Sharma is a legal writer at Mirza Law in Toronto. She writes about wrongful dismissal, workplace rights, and what Ontario employees can do when they are treated unfairly.

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