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bonus eligibility

Communicating bonus preconditions to employees

In the last few months, there has been an influx of commentary on the enforceability of contractual provisions purporting to limit an employee’s bonus entitlements upon termination. Following the Ontario Court of Appeal’s seminal decisions in Paquette v. TeraGo Networks Inc. and Lin v. Ontario Teachers’ Pension Plan, much of this commentary has focused on the language needed to oust an employee’s implied right to their complete compensation package during the reasonable notice period. This focus on semantics has overshadowed one other consideration that remains instrumental to the enforceability of bonus provisions—the need to sufficiently communicate to employees the preconditions of bonus eligibility.

 

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