“Discretionary” Bonuses Contain Implied Term that the Discretion Will be Exercised in a Fair and Reasonable Manner: ONCA

If a company describes an employee’s bonus payment as being “discretionary”, with the allocation of bonuses to employees being “purely subjective” and completely bereft of any calculations, does that mean that the company can do whatever it wants in respect of such bonus?

In Bowen v. JC Clark Ltd., 2022 ONCA 614 (CanLII), the Court of Appeal for Ontario (Feldman, George and Copeland JJ.A.) held that “Where an employment agreement provides for a discretionary bonus, there is an implied term that the discretion will be exercised in a fair and reasonable manner.”

Shareholders’ Agreement All That Matters For Shareholder Rights in Wrongful Dismissal Analysis

What happens to an employee’s rights under a shareholders’ agreement if the employee is wrongfully dismissed?

According to the Court of Appeal for Ontario in Mikelsteins v. Morrison Hershfield Limited, 2019 ONCA 515, the fact that an employee was “wrongfully dismissed” may be irrelevant.

Employee Entitled to Vacation Pay on "Discretionary" Bonus

When is a “discretionary” bonus to be included in the statutory definition of “wages”? According to a 2016 decision of the Ontario Superior Court of Justice, Bain v UBS, 2016 ONSC 5362 (CanLII), affirmed by the Court of Appeal for Ontario in Bain v. UBS Securities Canada Inc., 2018 ONCA 190 (CanLII), when “there were definite factors on which it was based, including performance.”

The case highlights the tension between irregular payments and the obligation to pay vacation pay.

ONSC Judge Would Have Ordered at Least 36 Months Reasonable Notice – If Requested

What is the appropriate notice period for a 62 year-old, 37 years tenured Senior Vice President, who is terminated without cause and left without any comparable employment opportunities?

According to the decision of the Honourable Mr. Justice D.J. Gordon of the Ontario Superior Court of Justice in Dawe v. Equitable Life Insurance Company, 2018 ONSC 3130, a minimum of 36 months.

Choice of Law Provisions: Application of the Ontario Employment Standards Act to International Employees

Can an employer and employee agree by contract that the laws of Ontario, Canada will apply to terms of their employment relationship, even if: (a) the employee works and is physically situated in in Los Angeles, California; and (b) the company is a New Jersey company with its head office in the State of Connecticut?

If the answer to that question is “yes”, do / can the employment standards set out in the Ontario Employment Standards Act, 2000 apply to such an employee?

Those were some of the questions put to the Honourable Justice James F. Diamond of the Ontario Superior Court of Justice in the case of McMichael v The New Zealand & Australian Lamb Company, 2018 ONSC 5422 (CanLII).

Failure to Pay $300,000 Bonus a Breach of Contract Only and Not a Constructive Dismissal: ONCA

(c) istock/Jummie

Can an employer breach a rather fundamental element of an employee’s employment contract (to the tune of over $300,000) without triggering a constructive dismissal?

In a decision released March 21, 2017, Chapman v. GPM Investment Management, 2017 ONCA 227, the Court of Appeal for Ontario said “yes.”

Voluntary Resignation Results in Forfeiture of Bonus: ONSC

“Got to pack my, things and go / Move fast not slow / That dog is mine.” Those are the opening lyrics to the song “The Dog is Mine” by Canadian rapper k-os. It’s a catchy song.

Those lyrics provide a great introduction not only to “The Dog is Mine”, they also provide a great introduction to the subject of whether an employee who voluntarily resigns from his employment is entitled to an earned but not yet paid incentive bonus.

In Bois v MD Physician Services Inc., 2016 ONSC 8133 (CanLII), the Honourable Justice Sylvia Corthorn of the Ontario Superior Court of Justice was tasked with answering the following legal question: If an employee is entitled to earn a bonus payment pursuant to the terms of a written employment contract, but a requirement of that employment contract - and a material condition precedent to the actual payment of the bonus - is that the employee must be “actively employed” on the date that the bonus payment is to be made by the employer, is the employee nonetheless entitled to the receipt of the earned but not yet paid bonus payment if he voluntarily resigns from his employment prior to the date on which the bonus payment is made? Put another way, can you still get your bonus if you quit before it's paid to you?

Employees Not “Actively Employed” Still Entitled to Bonus Payments: ONCA

EA Sports, the makers of such videogame as NHL hockey and Madden NFL football, previously employed the motto, “If it's in the game, it's in the game”, meaning that if something happened in the real game, then it would appear in the videogame. More recently, the motto has been shorted to simply “It’s in the game.”

While it is highly unlikely we will see a member of Ontario’s judiciary on the cover on NHL 18, the court did just lay some serious body checks, figuratively speaking, on Ontario’s employers. Following two decisions from the Court of Appeal for Ontario Paquette v. TeraGo Networks Inc., 2016 ONCA 618 (CanLII) and Lin v. Ontario Teachers' Pension Plan, 2016 ONCA 619 (CanLII), both of which were released on August 9, 2016, Ontario’s employers would be prudent to heed this warning: “In determining damages for wrongful dismissal, Ontario’s court will typically include all of the compensation and benefits that the employee would have earned during the notice period.” Put another way, “If it’s in the game, it’s in the game.”

"Cynical, Patronizing, Unfair, Impractical, and Expensive" - How Justice Perell described the Partial Summary Judgment Approach to Wrongful Dismissal Cases

Summary judgment, a method of resolving lawsuits without the need for a trial, has long been considered an appropriate means by which to resolve wrongful dismissal cases. The changes made in 2010 to the Rules of Civil Procedure, the rules governing lawsuits in Ontario, served only to increase the popularity of such a process.

But, as this blog has considered on more than one occasion, the speed and efficiency of summary judgment bring with them their own challenges in wrongful dismissal cases; most acutely what to do about the dismissed employee’s duty to mitigate?

In April of 2015, in the case of Markoulakis v SNC-Lavalin Inc., 2015 ONSC 1081 (CanLII) the Honourable Justice Andra Pollak held that the use of the “Trust Approach” previously approved by the Court of Appeal for Ontario in Cronk v. Canadian General Insurance Co. (1995), 25 OR (3d) 505 (CA) was no longer appropriate given the decision of the Supreme Court of Canada in Hryniak v. Mauldin, 2014 SCC 7. That case was summarized by this blog in the post Rushing to Judgment: How to Reconcile the Duty to Mitigate with Summary Judgment in Wrongful Dismissal Cases.

More recently however, on June 29, 2015, the Honourable Justice Paul Perell, also of the Ontario Superior Court of Justice, in the case of Paquette v TeraGo Networks Inc., 2015 ONSC 4189 (CanLII) described the "Partial Summary Judgment Approach", where the employee is granted a partial summary judgment and the parties return to court during and or at the end of the notice period for further payments subject to the duty to mitigate, employed by Justice Pollak as “cynical, patronizing, unfair, impractical, and expensive.” Justice Perell specifically mentioned the Markoulakis case in making such comments.

Ouch.

Dismissed Employees Still Entitled to Bonus

Is an employee dismissed just before the employer declares a “discretionary bonus” still entitled to that bonus?  “Yes” says a recent decision from the Quebec Superior Court.