Alberta clarifies LTIP bonus upon termination

Appeal court reverses ‘surprising’ Styles decision
By Sarah Dobson
|Canadian HR Reporter|Last Updated: 02/17/2017

When the Oct. 5, 2015, decision came out, it caused quite a stir. A dismissed employee was awarded damages of $444,205 when the Court of Queen’s Bench of Alberta decided his employer breached the employment contract and long-term incentive plan agreement.

But in reversing that ruling on Jan. 4, the Court of Appeal of Alberta has set things straight, according to legal experts — and provided relief to many employers with such plans.

“Most employers’ counsel were shocked when they saw (the 2015) decision and weren’t happy… because it really took the principles of good faith and extended them really far, and it also went in direct contrast to the plain language drafting of the long-term incentive plan, so that was very scary,” said Sheena Owens, an associate at Gowling in Calgary.