Focus On

CONTRACT OF EMPLOYMENT - Express terms - Remuneration - Bonuses

Wednesday, November 29, 2017 @ 8:32 AM  

Lexis Advance® Quicklaw®
Appeal by Bois from the motion judge’s determination that the active employment requirement in his employers’ Variable Incentive Plan (VIP) under which Bois was awarded a bonus was not in conflict with provisions of the Employment Standards Act (Act). Bois was employed from August 1997 until his resignation in October 2011. Under the VIP, bonuses awarded for a year were payable in equal installments over the three years following the calendar year for which the bonus was awarded. Such payments were made in February or March. In 2009 and 2010, Bois was awarded bonuses under the VIP. He was denied payment of outstanding amounts at the time of his resignation because, at the time the bonus installments were due to be paid, he was no longer employed with the organization. He commenced the present action to recover the outstanding amounts, totalling $114,917. The judge interpreted the VIP as requiring an employee to be actively employed on the date of a bonus installment payment in order to receive the installment. She also held that Bois had notice of the active employment eligibility requirement and he knew, or ought to have known, when he resigned that he would be forfeiting entitlement to the bonus. She reviewed the provisions of the Act and concluded that the employers rightfully and correctly determined that, by reason of Bois’ resignation, his entitlement to the bonus was extinguished.

HELD: Appeal dismissed. There was no error in the judge’s conclusion. The parties were free to agree upon how and when any bonus would be declared, earned, accrued and paid. Bois was not entitled to the three bonus installments with payout dates that fell well after the date he resigned. While these installments would constitute wages payable upon each of the future payout dates, they were not wages to which Bois was entitled when he resigned.

Bois v. MD Physician Services Inc., [2017] O.J. No. 5791, Ontario Court of Appeal, J.M. Simmons, P.S. Rouleau and D.M. Brown JJ.A., November 8, 2017. Digest No. TLD-November272017005