severance pay

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Termination clauses are a cornerstone of any employment agreement. A well-drafted termination clause can limit an employee’s entitlements on dismissal to the minimum standards under the Employment Standards Act, 2000 (ESA), helping avoid the higher costs of common law reasonable notice.

But here is the catch: even the most carefully written clause can fail. Ontario courts are strict about wording and employer conduct. Clauses that are short, clear, and directly reference the ESA tend to stand up over time. However, one misstep in how a termination clause, or the termination itself, is handled can unravel the entire clause. Continue Reading Ontario Termination Clauses: What Really Matters

The Ontario Superior Court recently reminded employers that employment agreements aren’t optional – they’re enforceable.

In Timmins v. Artisan Cells, 2025 CanLII 2387, the employer ignored its own termination provisions and tried to use severance as leverage for a release. It backfired big time.Continue Reading Don’t Use Severance as Leverage: Courts are Not Impressed

If you’re reviewing a termination package that includes a ‘retiring allowance,’ it might sound like a perk tied to retirement. That makes sense, right? Not really.

Despite the name, a retirement allowance in Canada has nothing to do with retirement. In most employment law cases, it simply means money paid to an employee upon or after termination of employment in recognition of long service. It’s a tax term, not a legal entitlement, and it often leads to confusion when planning severance packages or reporting to the CRA. Let’s break down what it is – and what it isn’t.Continue Reading Retiring Allowances – Don’t Be Fooled by the Name

As an employer, understanding the legal framework surrounding employee leaves is crucial to mitigating legal risks and ensuring compliance with employment laws.

Employers may face challenges when making business decisions that impact employees on leave, including questions about whether termination is permissible during a leave of absence.Continue Reading Out of Sight, Out of Work? Important Considerations for Terminating on Leave

Underperformance can be a big issue for employers, especially in smaller organizations where every employee’s contribution matters.

There can be serious costs to the business. Before you terminate someone, you need to understand the legal framework in Ontario. Skipping the proper steps can expose your business to claims for wrongful dismissal, which can be even more expensive.Continue Reading Can I Terminate an Employee for Underperforming?

severance and employer payroll threshold
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A new ruling from Ontario’s Divisional Court has changed which employees will be entitled to severance pay. While the law has been mixed, it was generally the case that the $2.5 million payroll threshold for the purposes of calculating severance pay applied to Ontario payroll only. The Divisional Court has now ruled that global payroll should be considered. 

What’s Severance Pay?

In Ontario, employers with a payroll of more than $2.5 million must, upon termination or severance of employment, pay severance pay to employees with five or more years of service. This aspect of the Ontario Employment Standards Act, 2000 (ESA) increases the legal minimums employers are required to pay to long service employees significantly. Under the ESA, notice of termination caps out at 8 weeks, whereas severance pay can be up to 26 weeks. 
Continue Reading Heads up Multinational Employers! A Change to the $2.5 Million Payroll Threshold Calculation.