Clear language needed to disentitle employees from post-termination bonuses

Aug 22, 2016


By Mika Imai

In 2015, the Ontario Superior Court of Justice heard two factually similar cases and came to opposite conclusions. Both cases dealt with employers who had denied bonuses to a terminated employee because he was no longer “actively employed” (a requirement under the bonus policies).

In Lin v Ontario Teachers’ Pension Plan, Justice Corbett concluded that, “where the bonus was promoted as an integral part of the employee’s cash compensation, it would be inappropriate and unfair . . . to be deprived of the bonus by reason of the unilateral action of the employer.”

Conversely, in Paquette v TeraGo Networks Inc., Justice Perell remarked: an individual is “. . . notionally an employee during the reasonable notice period; however, he will not be an ‘active employee’ and, therefore, he does not qualify for a bonus.”

Both decisions were appealed and, on August 9, 2016, Lin was upheld and Paquette overturned. In Paquette, the Court of Appeal outlined the correct approach to post-termination bonus cases:

“The first step is to consider the appellant’s common law rights. In circumstances where, as here, there was a finding that the bonus was an integral part of the terminated employee’s compensation, [the employee] would have been eligible to receive a bonus . . . had he continued to be employed during the . . . notice period.

The second step is to determine whether there is something in the bonus plan that would specifically remove the appellant’s common law entitlement. The question is not whether the contract or plan is ambiguous, but whether the wording of the plan unambiguously alters or removes the appellant’s common law rights.”

In considering the second step, the Court of Appeal found that the “active” service requirement was not clear enough to disentitle the employee to the post-termination bonus.

This new direction from the Court of Appeal should encourage employees to carefully review employment contracts for language removing their right to post-termination bonuses. Employers seeking to limit liability will need agreements with clear language.

Symes Street & Millard has extensive experience attaining compensation for employees who have been wrongfully dismissed and drafting employment contracts for employers. Contact us at the number above to discuss your options.



New legislation on workplace sexual harassment

Aug 17, 2016

As of September 8, 2016, employers must comply with Bill 132, the Sexual Violence and Harassment Action Plan Act. Bill 132 adds “workplace sexual harassment” to the definition of “workplace harassment” under the Occupational Health and Safety Act (“OHSA”) and establishes more onerous requirements on employers. As a result, Bill 132 makes workplace sexual harassment more than an issue of discrimination under the Ontario Human Rights Code, but also a health and safety consideration under OHSA.

Prior to Bill 132, employers were required to maintain policies and programs on workplace violence and harassment. Policies had to be in writing for workplaces of six or more employees; programs did not have to be in writing. Under Bill 132, employers must now have a written program on workplace harassment. Unlike before, the program must be prepared in consultation with the committee or a health and safety representative, if any (i.e. in workplaces of six or more employees).

The requirements of workplace harassment programs, which are to be reviewed at least annually, are also more arduous under Bill 132. Previously, workplace harassment programs only had to detail reporting and investigation procedures. While those provisions remain, programs must also include measures for:

  • reporting incidents to persons other than the employer or supervisor, if they are the alleged harasser;
  • ensuring the confidentiality of identifying information about involved individuals; and
  • how the worker who allegedly experienced the harassment and the alleged harasser are to be informed of the investigation and any corrective action that took place.

Of note, Bill 132 requires that investigations be “appropriate in the circumstances”. Moreover, inspectors are empowered to order an employer to conduct an investigation by an impartial person, at the employer’s expense. These changes suggest the potential for new oversight by the Ministry of Labour.

Symes Street & Millard has extensive experience preparing workplace health and safety policies and programs. We would be happy to help you meet your obligations under Bill 132 before the September 8, 2016 deadline.

By Mika Imai; photo by Scazon, used under creative commons commercial license.

Congratulations, Beth Symes, on being named one of the best lawyers in Canada

Aug 10, 2016

Symes Street & Millard would like to congratulate Beth Symes on being named one of the Best Lawyers in Canada in the area of Labour and Employment. Beth has over 35 years of experience as a lawyer specializing in workplace issues, including wrongful dismissal, grievance arbitration, disability accommodation and workplace discrimination. Among her many roles, she was the first Chair of the Pay Equity Hearings Tribunal in 1988.

Best Lawyers is a longstanding peer-review guide. The 2017 edition is their 11th annual list of Best Lawyers in Canada.

congratsBeth adds this to a long list of accolades. She is a Member of the Order of Canada, and she was elected by her peers to four terms as a Bencher of the Law Society of Upper Canada. She was awarded the Law Society Medal in 1996. Beth has been voted one of the Top 25 Most Influential Lawyers in Canada and recognized as one of Canada’s Top 25 Women of Influence.

You can read more about Beth’s practice here.

Symes Street & Millard specializes in employment and human rights law and has represented parties in many cases both inside and outside of the courtroom.

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