Bonus Pay After Termination in Ontario: Are You Entitled to It?

Am I entitled to my bonus if I am terminated without cause in Ontario?

Potentially yes. Where your bonus was a regular, predictable part of your total compensation and would have been paid during the wrongful dismissal notice period, Ontario courts frequently include its value in the damages calculation. The specific wording of your employment contract and bonus plan, the history of how the bonus was paid, and whether the bonus was based on defined performance criteria or was genuinely at the employer's discretion all affect the outcome. Getting the specific language and circumstances reviewed is the most reliable way to assess your entitlement.

What does "actively employed" mean in an Ontario bonus clause?

Many bonus plans include a clause stating the employee must be "actively employed" on the payout date to receive the bonus. Ontario courts have refused to enforce this type of clause in circumstances where enforcing it would produce an unfair result particularly where the employee was terminated without cause after performing the work that generated the bonus and the only reason they were not "actively employed" on the payout date was the termination itself. The enforceability of an "actively employed" clause depends on how it is worded, the circumstances of the termination, and how courts assess the fairness of the outcome.

Can an employer withhold a bonus by calling it "discretionary" in Ontario?

Not automatically. Where a bonus is labelled as discretionary but has been paid consistently based on defined performance criteria, Ontario courts assess whether the discretion was genuine or whether the bonus was effectively earned compensation. An employer cannot use "discretionary" language to avoid paying a bonus that the employee earned through meeting defined targets, particularly where the same employer has paid the bonus every year on substantially similar facts. The label is not determinative how the bonus was actually administered is.

What about deferred bonuses, LTIPs, or stock awards that did not vest before I was terminated?

Deferred compensation disputes are complex and depend heavily on the specific plan documentation. Key questions are whether the award had already been earned through performance before termination, whether the vesting schedule was designed to deprive employees of earned compensation on termination, and whether the plan documents clearly and unambiguously eliminate entitlement on termination. These cases can involve significant value in some cases years of deferred compensation and are worth a legal review of the specific plan terms before any entitlement is accepted as lost.

What should I do if my Ontario employer withheld my bonus after termination?

Do not accept the employer's position without a legal review of your specific contract and bonus plan language. Gather your employment contract, any bonus plan documents, any communications about your bonus, your performance history, and records of prior bonus payments. Get legal advice on whether the specific circumstances the timing of your termination, the basis for the bonus, and how it was historically administered support a claim. Bonus disputes are among the most litigated components of Ontario wrongful dismissal claims and are frequently resolved in the employee's favour.