Exec caught stealing company resources still entitled to bonuses

Employer can’t withhold regular bonuses that were part of executive’s pay, despite misconduct: Court
By Jeffrey R. Smith
|Canadian Employment Law Today|Last Updated: 07/31/2012

An Ontario company who fired an executive for stealing labour and materials for his personal use had just cause for dismissal but must pay him the bonuses he earned at the same time as his misconduct, the Ontario Court of Appeal has ruled.

Leonard Rossetto was an executive with Mady Development Corp. in Toronto. In the fall of 2007, Rossetto was renovating his house and used company funds to pay for it. He also diverted Mady labour and used Mady materials in the renovations. It took a year for Mady to discover what Rossetto did, but when it did, it terminated his employment for cause on Dec. 12, 2008.

Mady followed up Rossetto’s termination by suing him for breach of employment contract, unjust enrichment and breach of fiduciary duty. Rossetto filed a countersuit demanding the payment of bonuses he was owed for 2007 and 2008. Under his employment contract, he was entitled to an annual bonus equal to 30 per cent of Mady’s profits after overhead.