Ontario's Employment Standards Act, 2000
("ESA") entitles an employee to severance pay upon
severance of employment if the employee was employed by the
employer for five years or more and the employer has a payroll of
$2.5 million or more.
There have been conflicting decisions over the years around the
calculation of the $2.5 million payroll threshold under the ESA and
whether an employer's payroll outside of Ontario is included.
The recent decision of Hawkes v. Max Aicher (North America)
Limited says that an employer's global
payroll must be used in the severance threshold calculation.
Background
The employee was employed by an Ontario-based subsidiary of a
European-based company. Following his termination, the employee
filed a complaint with the Ministry of Labour alleging that he was
entitled to termination pay, vacation pay, and severance pay. The
Employment Standards Officer ("ESO") determined that the
employee was not entitled to severance pay because
