Pulling back bonuses has its perils: Experts

eHealth Ontario bows to public pressure, rescinds merit raises
By Sarah Dobson
|Canadian HR Reporter|Last Updated: 07/19/2011

An employer’s decision to rescind bonuses and merit raises, as seen recently at eHealth Ontario, treads treacherous waters, both from a legal and governance standpoint, say experts.

In the third week of May, many employees at the government agency — dedicated to building electronic health records for the province — were informed they would be given merit raises up to 1.9 per cent or bonuses up to 7.8 per cent. However, scathing media reports led to the withdrawal of the offer a few days later.

“On many levels, I’m absolutely floored by what happened here,” said Bob Levasseur, senior consultant and principal at McDowall and Associates in Toronto. “It’s extremely rare — I can’t think of management making a decision and then, after the fact, having what is basically the drain plug pulled and that’s that.”