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ARTICLE · 25 JUNE 2021

Ontario Employers Must Calculate Severance Threshold Based On Global Payroll

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The Ontario Divisional Court has changed the game for Ontario employers by finding that the payroll threshold for determining if an employer is a severance payor under the Employment Standards Act...

CanadaEmployment and HR
Kyle Lambert
Kyle Lambert
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The Ontario Divisional Court has changed the game for Ontario employers by finding that the payroll threshold for determining if an employer is a severance payor under the Employment Standards Act, 2000 (ESA) is based on the employer's global payroll, rather than just Ontario or Canadian payroll.

The Divisional Court heard an application for judicial review of a decision by the Ontario Labour Relations Board (Board) in which it found that applicant Doug Hawkes was not entitled to severance pay from the defendant Max Aicher under section 64(1)(b) of the ESA.

Section 64(1) ESA states:

"An employer who severs an employment relationship with an employee shall pay severance pay to the employee if the employee was employed by the employer for five years or more and,

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