Even a 'notwithstanding' clause couldn't override an employee's dismissal rights
A nine-year employee of Vermilion Energy Inc. is set to receive share award damages after an Alberta court found the company's incentive plan language too vague to strip her of shares vesting during her notice period. In McElgunn v Vermilion Energy Inc, Justice C.D. Simard of the Court of King's Bench of Alberta issued the ruling on March 12, 2026.
Julia McElgunn was a Senior Geological Advisor with approximately nine years of service when Vermilion terminated her on August 24, 2022, without cause or reasonable notice. An arbitrator found she was entitled to 10 months' notice, extending her compensation window to June 24, 2023.
Under Vermilion's Incentive Plan, McElgunn held 7,053 shares set to vest on April 1, 2023, a date that fell within her notice period. Applying the Supreme Court of Canada's two-step test from Matthews v Ocean Nutrition Limited, 2020 SCC 26, the Arbitrator found she would have been entitled to those shares but for her termination, a finding both parties accepted.
McElgunn appealed two issues from the arbitral award: whether the Arbitrator breached procedural fairness by relying on a Board Amendment Provision not expressly pleaded by Vermilion, and whether he erred in applying part two of the Matthews test. Justice Simard dismissed the first ground but allowed the second, finding that the 2020 Early Termination Provision did not absolutely clearly and unambiguously remove...
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