Employees who are terminated without notice can sue employers for the total compensation, including bonus payments, which they would have otherwise received during the notice period if reasonable notice had been given.
Paquette v TeraGo Networks Inc.
Bonus plans in employment contracts are a great way to motivate, reward and retain employees. Many of these bonus plans have built–in conditions that must be met before these bonuses are paid out. For example, an employee must be actively employed at the time the bonus is paid. Increasingly, the courts are being asked to determine whether these conditions have to be met and whether a bonus is owing. A recent decision by the Ontario Court of Appeal will come as a surprise to many of you.