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ARTICLE · 30 MAY 2025

Share Buy Back Clause Limits Employer Liability During Reasonable Notice Period

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In Kirke v. Spartan Controls Ltd., the Alberta Court of Appeal held that while shareholder profit sharing (SHPS) payments can form an integral part of an employee's compensation package...

CanadaEmployment and HR
Stefanie Di Francesco
Stefanie Di Francesco
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In Kirke v. Spartan Controls Ltd., the Alberta Court of Appeal held that while shareholder profit sharing (SHPS) payments can form an integral part of an employee's compensation package, a well-drafted share buy back clause can limit the employee's entitlement to such payments during the reasonable notice period.

Background

In this case, Spartan Controls Limited (Spartan) terminated Mr. Kirke's employment on a without-cause basis after almost 25 years of service. Following a summary trial, Mr. Kirke was awarded damages in lieu of 20 months of reasonable notice of termination under the common law based on his base pay, benefits and quarterly bonus payments only. This decision spared Spartan from having to provide SHPS payments to Mr. Kirke over the 20-month notice period as well.

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