Imagine that you arrive at work on Monday morning, and you are called into a meeting in a windowless boardroom with your direct superior who, to your great surprise, is accompanied by an HR representative. Only the HR representative makes direct eye contact and after many years of loyal service an ominous brown envelope is slid your way. In it, you find two copies of a letter with the large words “Private & Confidential” imprinted on top. The letter contains your severance package which, you are assured, contains fair compensation – at least it seems that way. You are encouraged to accept it but not before you execute the enclosed “full and final release.” You notice that your severance package is accurately reflective of your annual salary to date. Still, you sigh and wonder if only you were dismissed one week later – that way, you would have been eligible to receive that $100,000 bonus you were surely going to get this year.
Does the above scenario sound familiar? Do not despair, you may yet be entitled to receive that bonus and then some.
In fact, not only are you likely eligible to receive the earned bonus, but you may also be entitled to seek compensation equaling to the value of the bonus prorated over the course of what should have been your notice of dismissal in addition to your base salary and all other benefits. This is the case even if your employment agreement with the company states that to be eligible to receive your bonus you must be “actively employed.”
This is surprising to many people, but Ontario courts are very protective of employees and the type of compensation that they are lawfully entitled to receive following their dismissal. Many employees find themselves financially and emotionally vulnerable when losing their job and courts typically try to maximize their entitlements in such instances.
In our practice we review severance packages and termination packages on a regular basis and many of the people who end up retaining our services are always pleasantly surprised to find out about their rights to getting a bonus after their departure. So, if you are faced with the above predicament, you should consider obtaining legal advice – it may make a big difference in the long run.