I have an employee who was terminated on Dec 4th. We pay semi monthly. He is entitled to one week pay in lieu of notice as per ESA Ontario. He also has some vacation pay owing. However, he has not yet signed back his termination letter and payroll submission is due today. I believe that we must pay him the 4 days worked and the one week pay in lieu for his Dec 15th pay. Can I withhold the vacation pay until he has signed back his termination release form?

No you cannot. Any vacation pay owed at the date of termination, plus any vacation pay which accrues during the statutory notice period must be paid in accordance with the ESA. It is not contingent on whether or not he signs a release. It is extremely important that you get some legal advice in the circumstances. There are a number of issues at play here which are worth discussing, including whether the employee may be owed common law severance (as opposed to just his minimum entitlements under the ESA). Feel free to give us a call at the number below to set up a confidential consultation.