Many employers have annual bonus plans which provide additional
compensation to employees upon the achievement of certain
objectives. In an attempt to avoid paying bonuses to terminated
employees, many bonus plans contain language stating that employees
must be “actively employed” upon the date of payout in
order to receive a bonus payment. A recent decision of
the Ontario Court of Appeal has confirmed that such language by
itself is not sufficient to deprive an employee, who is terminated
without cause, of compensation for a bonus.
In the decision of Paquette v. TeraGo Networks Inc.,
TeraGo’s program provided that an employee must be
“actively employed by TeraGo on the date of the bonus
payout.” Mr. Paquette worked for TeraGo for 14 years and held
the position of Director, Billing and Operation Support Services at
the time of his without cause termination. Mr. Paquette
participated in the bonus program and received bonuses in each of
the 4 years prior to his
