Employees of charities and nonprofit organizations in Canada can be entitled to substantial severance pay when they lose their jobs. Funding cuts, lost grants or financial difficulties don’t automatically eliminate an employer’s obligation to provide compensation.
If you’ve been laid off, fired or told your position is being eliminated, you could be owed significantly more than your organization has offered.
? Charity & Nonprofit Severance: Non-unionized employees in Ontario, Alberta and British Columbia can qualify for severance of up to 24 months’ pay, depending on their circumstances. Working for a charitable organization doesn’t automatically reduce your entitlement.
On This Page:
- 1. Severance Rights
- 2. How Much Severance?
- 3. Funding Cuts & Closures
- 4. Fixed-Term Contracts
- 5. Changes to Your Job
- 6. What to Do Next
Do Charity and Nonprofit Employees Get Severance Pay?
Yes. Employees of registered charities, nonprofit organizations and other not-for-profit employers can have severance rights when their employment ends.
These rights can apply to:
- Program coordinators and support staff
- Fundraisers and development officers
- Administrative and finance employees
- Managers, directors and executive directors
- Other paid nonprofit and charitable-sector employees
Your organization’s charitable status doesn’t automatically exempt it from employment laws. Your rights depend on your employment arrangement, contract and applicable provincial or federal rules.
If you’re unionized, your collective agreement and grievance process generally govern termination disputes.
How Much Severance Pay Are Nonprofit Employees Owed?
There’s no automatic severance formula based on years of service. Your full entitlement can be much higher than the minimum amount required under employment standards legislation – as much as 24 months’ pay.
Factors that can affect your compensation include:
- Age: Older employees may face greater difficulty finding comparable work.
- Length of Service: Long-term employment can increase your entitlement.
- Position: Your responsibilities, seniority and specialized experience.
- Job Opportunities: The availability of comparable employment.
- Employment Contract: Whether enforceable terms affect your severance rights.
Your package may also include compensation for lost benefits, bonuses and other employment income.
Learn more about severance pay in Canada or use our free Severance Pay Calculator for an initial estimate.
What Happens When a Charity Loses Funding or Closes?
Losing a government grant, major donor or other funding source doesn’t automatically allow a nonprofit to terminate employees without severance.
If your position is eliminated because of budget cuts, restructuring or a program closure, you may still be entitled to termination compensation.
What If the Organization Says It Can’t Afford Severance?
Financial difficulties don’t automatically erase an employer’s legal obligations. However, insolvency or bankruptcy can affect what compensation can be recovered.
Don’t assume that an organization with limited funding can offer only a few weeks’ pay.
Can a Nonprofit Lay Off Employees Without Severance?
Not necessarily. A temporary layoff or permanent job elimination can create termination and severance rights, depending on your employment contract and the law that applies.
Read our guides:
Do Grant-Funded and Fixed-Term Employees Get Severance?
Being paid through a grant or working under a fixed-term contract doesn’t automatically eliminate your employment rights.
The wording of your agreement matters, particularly if:
- Your contract ends before its agreed expiry date
- You’ve worked under several renewed contracts
- Your employer claims your position ended when funding expired
- You’ve continued working beyond your contract’s original end date
A valid fixed-term contract may end without additional common-law notice when its agreed term expires. However, ending the contract early without an enforceable termination clause can create a substantial compensation claim.
Learn more about fixed-term employment contracts in Canada.
What If Your Nonprofit Cuts Your Pay, Hours or Responsibilities?
A major change to your employment without your agreement can amount to constructive dismissal.
For example, your employer might:
- Significantly reduce your salary or working hours
- Demote you or remove important responsibilities
- Fundamentally change your position during restructuring
These changes can create severance rights even if your employer hasn’t formally fired you.
Read more about constructive dismissal in Canada.
⚠️ Don’t Resign or Accept a Major Change Without Advice: Your response can affect your right to severance. Have the situation reviewed before making a decision.
What Should You Do If Your Nonprofit Job Ends?
- Keep your employment documents. Save your contract, renewals, termination letter and severance offer.
- Don’t assume funding cuts eliminate severance. Your employer’s financial situation doesn’t automatically determine your rights.
- Check your full compensation. Account for salary, benefits and other applicable payments.
- Have your severance reviewed. Don’t sign a release before understanding your entitlement.
Get the Severance Pay You’re Owed
Losing your job at a charity or nonprofit doesn’t mean you have to accept less severance.
Samfiru Tumarkin LLP helps non-unionized employees in Ontario, Alberta and British Columbia challenge inadequate severance offers, review fixed-term contracts and pursue the compensation they’re entitled to receive.
Before you sign, always check first.