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Bonuses and other forms of incentive compensation often form a significant part of employees’ compensation.  Upon termination, an issue that often arises in determining an employee’s legal entitlements is whether a bonus payment is included or not in a severance package. Under common law, an employee is entitled to all compensation that he or she would have earned during the reasonable notice period. If the employee would have earned a bonus payment during the reasonable notice period, then he or she is entitled to the bonus as part of his or her severance package.

However, many employers have written bonus plans or policies that contain certain terms regarding an employee’s entitlement to a bonus, including upon termination.  In particular, in an attempt to limit liability upon termination, many of these bonus plans or policies contain language stating that an employee must be “actively employed” upon the date of payout … Continue reading

On July 14, 2016, the Supreme Court of Canada ruled in Wilson v. Atomic Energy that the “unjust dismissal” provisions contained in Part III of the Canada Labour Code ensure that non-unionized employees of federally regulated employers are protected from termination of their employment without cause and that federally regulated employers cannot avoid this protection by providing an employee with termination notice and/or severance pay in lieu of notice.

Victory for Federally Regulated Employees

This landmark decision confirms that non-unionized employees working in federally-regulated businesses enjoy the similar protection that unionized employees have managed to collectively bargained in collective agreements with their employers.  Wilson also means that, with some exceptions, a federally regulated employer must prove “just cause” to lawfully terminate an employee.

The common law permits an employer to dismiss a non-unionized employee without cause if it provides the employee with proper notice or pay in lieu of … Continue reading