In Ontario, under the Employment Standards
Act, 2000 (the "ESA"), an employer is
required to provide an employee whose employment has been severed
with statutory severance pay, if certain conditions are met.
Severance pay is only payable if the employer has a payroll of
$2.5 million or more. However, for many employers in an
increasingly globalized world, this condition inevitably leads to
questions of – Which payroll and where?
Background
In 2014, the Superior Court of Justice in Paquette v
Quadraspec Inc. (“Paquette”) rejected the
prevailing method of calculating statutory severance pay, which
restricted the calculation of an employer’s payroll to only
those employees employed in Ontario. The Superior Court noted that,
had the legislature wished to exclude extra-provincial payroll, it
could have done so explicitly. The fact that the legislature chose
not to do so, coupled with the purpose of statutory severance pay
(i.e. to compensate long-service employees),
