Showing posts with label ESA s. 64. Show all posts
Showing posts with label ESA s. 64. Show all posts

Saturday 10 July 2021

Pointe Finale! Calculation of "Payroll" for Severance Purposes Not Limited to Just Ontario: Divisional Court

Section 64(1)(b) of the Ontario Employment Standards Act, 2000 requires an employer who severs an employment relationship with an employee to pay severance pay to the employee if: (a) the employee was employed by the employer for five years or more; and (b) the employer “has a payroll of $2.5 million or more.”

The question of how to calculate the employer’s payroll, specifically whether one is to consider the employer’s global payroll or only the employer’s Ontario-based payroll has (for some reason) continued to be a source of confusion.

In Hawkes v. Max Aicher (North America) Limited, 2021 ONSC 4290 (CanLII), the Ontario Divisional Court (Dambrot, Lederer and Favreau J.J.) has finally, hopefully, laid the question to rest.

Saturday 27 May 2017

Mo Money Mo Problems (A Review of Termination Pay Obligations for Large Payrolls)

On May 27, 2017, I presented a paper to the County of Carleton Law Association’s annual solicitor’s conference titled “Mo Money Mo Problems (A Review of Termination Pay Obligations for Large Payrolls).” What follows is a copy of that paper.

I can think of no better way to introduce the subject of termination pay obligations for large payrolls than the lyrical hook to the song Mo Money Mo Problems by artist The Notorious B.I.G.:

I don't know what, they want from me

It's like the more money we come across

The more problems we see

The purpose of this paper is to canvass the subject of the obligation to pay statutory severance pay. As will be explained more fully below, pursuant to the provisions of section 64 of the Ontario Employment Standards Act, 2000, it is patently obvious that, notwithstanding anything Ol’ Dirty Bastard may have said about the subject, [“Look here, more money, more problems, my ass / You'se a naive cat, if you still believe that …”] the more money that employers come across, the more problems they’ll see.

Saturday 29 October 2016

Employment Contract Deemed Void Ab Initio for Failing to Account for Hypothetical Severance

If an employment contract makes no mention of the payment of statutory severance in the event of a termination without cause, is the contract legally unenforceable regardless of whether the employee is actually entitled to severance at the time of dismissal? That is to say, must an employment agreement account for all future hypothetical scenarios in order to be legally binding?

In the case of Garreton v Complete Innovations Inc., 2016 ONSC 1178 the Honourable Mr. Justice Laurence A. Pattillo endorsed the words of Justice Low in Wunderman, “It is not that difficult to draft a clause that complies completely with the Act, no matter the circumstance” and held that, unless an employment contract would always be valid, no matter what the reality at the time of termination, it is void from the start.

Sunday 15 June 2014

The Requirement to Pay Severance in Ontario - The Decision in Paquette c. Quadraspec Inc., 2014 ONCS 2431

In a decision that will be sure to have ripple effects beyond Ontario’s borders, an Ontario Superior Court judge has ruled that for the purposes of calculating an employer’s payroll, in order to determine whether an employee is entitled to statutory severance pursuant to section 64 of the Ontario Employment Standards Act, 2000, one looks at the employer’s entire payroll, not just that of its employees in Ontario.

The case is important because under a previous line of cases, the most recent of which being Altman v. Steve’s Music, 2011 ONSC 1480 (CanLII), the court had held that it was only the employer’s payroll in Ontario that was to be considered.

For employers with operations both inside and outside of Ontario, what the case means is that even if your operations in Ontario are modest, if the company’s total payroll exceeds the statutory limits of $2.5 million dollars, employees working in Ontario may now be entitled to statutory severance pay. This decision has the potential to increase an employer’s contingent liability with respect to severance obligations by a factor of more than three!

Tuesday 13 November 2012

The $2.5 Million Dollar Question


Not every employee who finds him or herself suddenly unemployed is entitled to severance pay in Ontario. Although almost all employees are entitled to “notice” of termination (employees on probation may not be entitled to notice, on this point see Probationary Periods and Notice,) significantly fewer are entitled to “severance.” (For a summary of what “notice” of termination entails, and wrongful dismissal generally see What is Wrongful Dismissal?)