Bonus payments for terminated workers

Two Ontario cases highlight challenges for employers around payments due
By Nafisah Chowdhury
|Canadian HR Reporter|Last Updated: 03/06/2017

When it comes to bonus payments for terminated employees, things have become that much tougher for employers.

On Aug. 9, 2016, the Ontario Court of Appeal released two decisions addressing employee entitlement to damages in lieu of a bonus on termination. Generally speaking, the court confirmed the principle that if a bonus forms an integral part of an employee’s total compensation package then, in a wrongful dismissal action, he is entitled to damages in lieu of the bonus unless there is enforceable bonus plan language that limits the employee’s entitlements. Where such language exists, it will be strictly construed.

The two decisions are summarized below: