Ontario court ruling exposes critical gap in how bonus plans are built
A former employee's counterclaim for an unpaid bonus has succeeded at the Ontario Court of Appeal.
On April 24, 2026, in Riva Plumbing Limited v. Ferrari, Justices George, Copeland and Gomery upheld a finding that a profit-based bonus scheme was non-discretionary and that continuing employment was not a condition of receiving it. The court also dismissed the employer's allegations of economic torts, fiduciary duty breaches and breach of a settlement agreement that included non-competition terms.
Riva Plumbing Limited, MDJL Holdings Ltd. and their principal Luca Montanaro launched claims against Anthony Ferrari, 531302 Ontario Inc., Icon Plumbing and Heating Ltd., Mike Ladisa and Joseph Ferrari. The appellants alleged the respondents had committed economic torts and breached fiduciary duties. They also alleged that Anthony Ferrari had breached the terms of a settlement agreement, which included non-competition terms.
The trial, before Justice Robert Centa of the Ontario Superior Court of Justice, ended with all those claims rejected. The trial judge found that “the trial evidence failed to prove that any of the respondents competed unlawfully or in breach of any duties owed to the appellants,” and the trial judge repeatedly made credibility findings adverse to Montanaro during the proceedings.
On appeal, the appellants raised four grounds, arguing errors of law in fiduciary duty principles,...
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