In a case argued by Susan Crawford of CCPartners, Judge S.A.Q.
Akhtar upheld the contractual provisions of an employment agreement
that prohibited an employee from being entitled to bonus if not
employed on the date of bonus payout. This decision provides
an excellent example of why clear contractual language is integral
to minimizing exposure for employers.
In Kielb v. National Money Mart Company, recently decided
in the Superior Court of Justice, the plaintiff Mr. Kielb was hired
by National Money Mart Company ("Money Mart"), in the
position of Vice President and Division General Counsel. When
negotiating the terms of his employment, Mr. Kielb made several
changes to the original offer, and had reservations about the level
of remuneration. However, included in the Agreement was the
opportunity for him to earn significant bonuses in accordance with
Money Mart's bonus plan, and therefore offset the lower base
salary. Ultimately, Mr. Kielb and Money Mart came to an
agreement and he signed a formal Employment Agreement.
That Employment Agreement set out specifically how Money
Mart's bonus plan worked, including identifying the
circumstances under which Mr. Kielb would become disentitled from
receiving the bonus: only if he was employed at the time of the
bonus being paid would he be eligible to receive bonus.
Notably, the Employment Agreement also provided examples of how
this would work in an attempt to clarify the bonus plan.
Money Mart terminated Mr. Kielb's employment without cause
in April, 2010 and paid him in accordance with his contractual
entitlements; as this was well in advance of the September, 2010
bonus payout date, and Mr. Kielb's notice period did not extend
through to the bonus payout date, Money Mart took the position
that, according to the terms of the bonus plan set out in the
Employment Agreement, Mr. Kielb was not entitled to any bonus
In suing for wrongful dismissal Mr. Kielb included a claim for
his expected bonus entitlements, arguing that the Limitation Clause
(the clause prohibiting him from receiving a bonus payment if he
was not an employee at the time of payout) of the Employment
Agreement was not enforceable on one or all of several different
In upholding Money Mart's contractual language, Justice
Akhtar reasoned that the explicit language in the Limitation
Clause, including the use of examples, made very clear the way the
bonus plan worked, and that there was no ambiguity with respect to
the fact that Mr. Kielb would not be entitled to any bonus payments
if he was not employed at the time of Money Mart's bonus
payout. Further, Justice Aktar held that, although some of
the terms of the Employment Agreement, and their application, may
be considered harsh or even "draconian", that did not
negate the fact that the language was clear, and that the
Employment Agreement was entered into by Mr. Kielb with full
knowledge. Justice Akhtar dismissed Mr. Kielb's claim in
This decision restores some faith in the applicability of basic
contract-law principles. While the sophistication of the
plaintiff cannot be ignored in this case – he was a lawyer,
after all – this case clearly stands for the proposition that
employers can still limit liability on termination by using clear,
explicit language in the drafting of employment agreements.
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guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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Unfortunately, reasonable accommodation for employees in the workplace continues to be the source of significant litigation and even today we continue to see outrageous examples of employers behaving badly.
We are now beginning to see reported cases involving charges and subsequent fines laid against employers for failing to provide information, instruction and supervision to protect a worker from workplace violence.
On October 13, 2016, the Supreme Court of Canada denied leave to appeal an Ontario Court of Appeal decision which ordered an employer to pay a former employee 37 months of salary and benefits following termination.
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