As with everything, it depends. But with a properly worded bonus
plan or contract, employers stand a much better chance of being
able to avoid paying bonus obligations to terminated employees.
Take, for example, the recent Ontario Superior Court decision in
Kielb v. National Money Mart Company. The Justice in that
case summarized the facts as follows:
allegations of broken promises,
ambiguous clauses and inequitable treatment and, at its heart, a
contract that was both enticing in its promises and cruel in its
This decision proves that employers can limit bonus payment
liability on termination by using clear and unambiguous language in
The main issue in Kielb was whether the language of the
employment contract restricted the former employee's
entitlement to a bonus. The employment contract required the
employee to be actively employed at the time of the bonus payout
or, if terminated, the employee had to be within the statutory
notice period. The Court held that the employment contract was
The clause limiting the bonus payment clearly set out how the
bonus plan worked. It was clear that the former employee would not
be entitled to any bonus payments if he or she was not employed at
the time the Company made the bonus payout. Although some terms of
the employment contract, such as the termination payment, may seem
draconian in their application, the language was clear and it was
part of an agreement entered into with the former employee's
The former employer successfully relied upon the clause limiting
bonus payment as its defence. The employment contract was found to
be unambiguous. The former employee, who was a lawyer, clearly
understood the clause. The Court noted as follows:
public policy would be ill served
by permitting the plaintiff to accept a potentially lucrative
position with the full knowledge that it contained a potentially
unfavourable limitation clause and then to complain when that
clause was actually executed.
There is nothing preventing such a clause from applying even if
the former employee worked the entire bonus year. And the same
considerations would apply for federally-regulated and
provincially-regulated employers. Employers should consider their
contracts and whether limiting bonus liability, post-termination,
in this way would work for them.
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.
A former teacher at Bodwell High School has learned a valuable lesson from the B.C. Human Rights Tribunal— it is not discriminatory for an employer to offer child-related benefits to only employees with children.
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.
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