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With its recent decision of Paquette c. TeraGo Networks Inc. , the Ontario Court of Appeal
Before this decision, the case law has been introduced in which case the language of the bonus plan requires that the employee be « actively employed » in order to receive payment of a bonus. For an employee-side counsel, this issue is likely to be unfair and unlawful. In so doing, the use would be considered to be of sufficient significance, which, depending on the time
In Paquette , however, the Court of Appeal took steps to remedy the injustice imposed by some of the law. It Did so by Noting That a plaintiff’s claim in Any wrongful dismissal actions is not for the lost bonuses Themselves , aim for damages to Compensate the employee for the loss of the bonuses, since he or she Was denied the opportunity to Qualify for Them When the to use reasonable notice, thus breaching the employment contract.
Accordingly, the Court of Appeal Determined que la motions judge in Paquette HAD erred in law by focusing on the unambiguous requirement of active employment included in the bonus plan. In so finding, the motions judge determined that the plaintiff was not entitled to the payment of the penalty during the 17-month period.
According to the Court of Appeal, the motions should be focused on the language of the plan and the requirement of « active employment » effectively limited the employee’s common law entitlement to be compensated for the period of time. In this case, there is no question that the plaintiff is aware of the terms of the plan and the requirement that he be actively employed in order to receive his bonus.
Although ultimately the Court of Appeal found that the language of the plan did not have any meaning in the law, it would still be crucial to an assessment of an employee’s entitlements upon termination.
Following its own rationale in Taggart c. Canada Life Assurance Co. , The Court of Appeal, which is a two-step test in the United States.
Step one of the analysis is to consider the common law right to damages for breach of contract.
A sufficient drafted employment agreement may be used to limit the employee’s entitlement to a qualifying period. Presumably, the language of such plans will be limited to the extent to which they are sufficient to determine the level of entitlement to unpaid bonuses.
In the context of the Employment Standards Act, 2000 , it is possible to make similar provisions. Therefore, we can presume that bonuses would have been payable during the statutory period. As well, any clause that attempts to limit the payment of a fee would have been payable during the period of validity of the agreement.
Furthermore, where the term is used in the context of the employment of employees, the following is a reference to the law: the plan language in pursuit of his or her common law entitlement to damages.
In this decision, the Court of Appeal Did not how the treatment of earned profit unpaid bonuses SPECIFICALLY, and whether language in a bonus map That requires active employment and adequately ousts a common law entitlement will Eliminate an employee’s entitlement to an accrued profit unpaid- at-the-time-of-termination bonus entitlement. While this should be avoided, the law will likely continue to garner attention to the issues.
If you have any questions about your own bonus, contact our Employment Law Group today.