THE QUESTION
I was just laid off from a sales position. We had a work-provided vehicle and could pay a small monthly fee to use the car for personal use. As part of the layoff, the vehicle was immediately taken back. Should we somehow be compensated in our severance package for the vehicle being taken away? I haven’t had a personal vehicle since I started this job, and now I’m left with the unenviable task of buying a new vehicle in this market.
THE FIRST ANSWER
Rahul Soni, employment lawyer, Soni Law Firm, Toronto
The answer is: it depends. Normally, you are not entitled to receive compensation when your employer takes back work-provided tools, including a vehicle. The logic is that those tools were provided to do your job – not for personal use. In fact, using workplace tools for personal use, without your employer’s approval, could get you in trouble.
However, in your case, your employer provided you with the option of using the work vehicle for personal use by paying a small monthly fee. The law treats this “option” as an employee benefit, like health benefits, RRSP matching plans or stock options. As a result, your employer must continue your vehicle access benefit, along with all other benefits, throughout the notice period.
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.
Assuming you worked for more than three months, your employer has failed to meet its legal obligation for continuing your vehicle access. You never had a personal vehicle since you started this job and need to find a replacement. So, you are entitled to recover the value of the vehicle access benefit, which may include recovering the rental or lease costs for a comparable vehicle over the required notice period. Speak with an employment lawyer to better understand your specific situation and the compensation you may be entitled to receive.
THE SECOND ANSWER
Sarah Levine, lawyer, Taylor Janis LLP, Edmonton
We will need to make a few assumptions in order to best answer your questions. First, when you say you were laid off, we will assume this was a permanent layoff as you have been offered severance, which means this would amount to a termination and be treated as such. Second, we will assume your sales position was for continuous, indefinite-term employment, which would entitle you upon the without-cause termination of your employment by your employer to notice of termination or pay in lieu of notice in accordance with both the applicable statute and the common law.
Your statutory entitlement, whether provincial or federal depending on the nature of your employer or the location of your work, only provides for pay in lieu of notice of your salary or wage for the prescribed period. Your common law entitlement is where you would be able to assert entitlement to the value of any benefit or bonus of employment during your notice period. This would include the value of the vehicle, subject to anything contained in your employment agreement, if any exists, that might restrict your entitlement to common law pay in lieu of notice upon termination.
If no such restriction exists, then you should be able to claim for the value of the company vehicle, less the personal amount you paid as that would represent the value of the employer’s contribution to that benefit you received during your employment. This would only be claimable for the length of your termination notice period, colloquially known as your severance period.
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Andrea Yu