There are several important takeaways from this decision for both employers and employees. The first is that the Court will carefully review bonus documentation for the parties' intention to remove any entitlement after termination.
In the case, Bain v. UBS, the Ontario Superior Court of Justice tackled the issue of whether bonuses are too be included when calculating the income that an individual would have earned during a period of reasonable notice.
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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