Employers who have a payroll of 2.5 million dollars
anywhere in the world will now have to
provide their qualifying Ontario employees with statutory severance
pay upon termination of employment. Previously, there was case law
to support that an employer's obligation to remit severance pay
would only be triggered if it had a payroll of over $2.5 million in
Ontario. However, a recent decision by
the Divisional Court makes it clear that borders will not protect
employers from owing severance pay to qualifying Ontario
employees.
Severance Pay in Ontario
The term "severance pay" is thrown around a lot, and
is commonly used to refer to any payment an employee receives upon
termination of their employment. However, in Ontario, the term
"severance pay" has a very specific meaning under the
Employment Standards Act, 2000 ("ESA"), and not
all employees are entitled to it (unlike notice of termination,
which almost everyone is entitled to, and which is also dealt
