Bonus entitlement during reasonable notice period

2 Ontario cases show differing circumstances where bonuses can and don’t have to be paid to terminated employees
By Brian Wasyliw
|Canadian Employment Law Today|Last Updated: 10/01/2015

Employers recognize an employee dismissed without cause is entitled to notice of dismissal or pay in lieu thereof. What many employers don't realize is that under statute and common law, the employee is entitled to any bonus during the applicable period of notice as if she had continued to work – the principle being the employee should be put in the same position she would have been had she continued to work to the end of the notice period. However, this principle can be modified through contractual terms.

There are three kinds of potential bonus entitlement upon termination: “accrued” or “vested” relating to a period already concluded but not yet paid; pro-rata or stub relating to a period in which an employee is terminated part-way; and prospective entitlement in respect of a future employment period – such as the notice period).