In Pacquette v TeraGo Networks ( 2016 ONCA 618 ) the Ontario
Court of Appeal reviewed a decision in which Perell J. had denied
the Plaintiff his bonus over the 17 month notice period because
there was a provision in the bonus plan which required the employee
to be " actively employed" at the time of payout in order
to receive his bonus.
The Court held that there was a two-step process in calculating
damages in a wrongful dismissal action:
First, because it was found that the bonus was an integral part
of the Plaintiff's compensation plan, his damages are to be
calculated on the basis of what they would have been had he been
permitted to work out his notice period.
Secondly, the Court is to then look at the language of the
relevant plan to see if there is anything which would disentitle
the Plaintiff to the bonus over the notice period.
To quote from the judgment:
 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, Paquette would have been eligible to
receive a bonus in February of 2015 and 2016, had he continued to
be employed during the 17 month 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: Taggart, at paras. 12, 19-22.
The Court went on to find that the term "active
employment" did not have the effect of limiting the bonus
entitlement over the notice period.
A term that requires active employment when the bonus is
paid, without more, is not sufficient to deprive an employee
terminated without reasonable notice of a claim for compensation
for the bonus he or she would have received during the notice
period, as part of his or her wrongful dismissal damages.
How then can an employer effectively deprive an employee of
their bonus over the notice period?
What language will be sufficient?
The Court had this to say about Kieran v. Ingram Micro Inc.
(2004), 33 C.C.E.L. (3d) 157 (Ont. C.A.),
 Kieran is a stock option case. The issue was whether
Mr. Kieran's time for exercising stock options upon the
termination of his employment was extended by the common law notice
period where he had been dismissed without cause. The stock option
plans provided that he had 60 days from the termination of his
employment for any reason other than death, disability or
retirement to exercise any rights then vested. "Termination of
employment" was defined as the date the employee "ceases
to perform services for" the employer "without regard to
whether the employee continues thereafter to receive any
compensatory payments there from or is paid salary thereby in lieu
of notice of termination."
 Lang J.A. explained, at para. 56, that under Ontario
law, "Mr. Kieran would be entitled to damages for the loss of
the plans, as they formed part of his compensation, absent
contractual terms to the contrary. In the presence of contractual
terms, those terms govern". She then concluded that the plans
were unambiguous as they "specifically provided that Mr.
Kieran's employment terminated on the date he ceased to perform
services, without regard to whether he continued to receive
compensatory payments or salary in lieu of notice."
Accordingly, Mr. Kieran's right to exercise the stock options
was not extended by the period of reasonable notice. He was not
entitled to damages for the stock options.
Therefore this case, although interesting on its facts, simply
stands for the proposition that the words " actively employed
" are ineffective in denying a plaintiff a payment that would
have occurred over the notice period, however smart employers will
probably be changing their plans immediately to include
Kierans' type language rather than the active employment
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