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Monday, June 9, 2025

Termination policy fails to block bonus entitlement in court ruling - HRD America

Employee deserved payment despite ceasing employment before payout date, says judge

Ontario's Superior Court of Justice recently dealt with a wrongful dismissal claim filed by a worker who challenged the enforceability of his employment contract's termination provisions.

The worker argued that the termination clause in his contract failed to comply with the Employment Standards Act (ESA), rendering it unenforceable. He sought 14 months' reasonable notice and additional damages, claiming he learned of his dismissal through a colleague's text message while on holiday.

The employer countered that the contract had been freely signed and was valid, arguing for a reduced notice period based on the worker's alleged failure to properly mitigate his damages after termination.

Termination clauses must meet ESA standards

The worker had been employed for about eight years at the company, holding the position of senior success signature engineer. On January 4, 2023, while on holiday, he received written notice that his employment would end eleven-and-a-half weeks later. He first learned about his termination through a text from a colleague who told him he had been "deactivated on Slack."

The employment contract contained a termination clause purporting to limit his entitlements. One document the worker signed when accepting employment was a "global employees handbook" that contained statements about employment "at will" - a concept not recognised in Ontario employment law.

Justice...



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