Stuart Rudner here with another video update on the law of employment. In this
case, I want to talk about the case of Ocean Nutrition Canada v. Matthews,
which comes out of Nova Scotia, and this deals with the types of damages an
employee is entitled to in a wrongful dismissal claim. Now, at Rudner Law we
work with employers and employees, and when we're talking about terminations without
cause, we always explain that by default the law provides an individual is
entitled to all the compensation, all of the benefits, that they would have
received during the notice period, as if they had worked in that period. So for
example, if the notice period is 12 months, it's wrong for an employer to say
that they will simply continue salary, for example, for 12 months, if that
individual will also receive bonus payments, commission payments, car
allowance, medical and dental benefits, etc., that's the starting point.
Now, that default can be changed by contract, or policy which is clearly
worded, and remove some of those rights. So for example, it's not uncommon to see
a bonus policy which says that the bonus will only be paid if the employee is
actively employed at the time of payout. If it's written properly, if the employee
was aware of it, or ought to have been aware of it, that type of thing will be
enforceable, however in many cases it's not done properly, and the employee's entitled to
far more than the employer initially offers. In the Matthews case there was a
constructive dismissal claim, I'm not going to bother with the facts of that,
the bottom line is that a court agreed that Mr. Mathews had been constructively
dismissed. The court found that he was entitled to a notice period of 15 months and
awarded him salary, other compensation benefits, including payments pursuant to
a long term incentive plan, or LTIP program, that existed in the company. That
was the basis upon which the company appealed, the company said that the plan
very clearly had wording which said it was of no force in effect if the
employee ceased to be employed, didn't matter what the reason, didn't matter if
they were terminated, if they resigned etc., but no matter what the reason was
the company said even if this individual was entitled to 15 months
of compensation, they should not get payments pursuant to the LTIP. That went to the
Court of Appeal in Nova Scotia and the Court of Appeal agreed, finding that
there may have been wrongful dismissal, or in this case a constructive dismissal,
but the individual is not entitled to LTIP payments during the 15 month
notice period. It's a lesson for employees: check your policies, check
your contracts very carefully to make sure that you have not inadvertently
withdrawn from a certain plan or payment that you will not be entitled to. And for
employers, make sure that your contracts and your policies are extremely clear, if
this is your intention, to say that the individual will not be entitled to those
benefits after they're no longer actively employed. If you are unsure in
any way, then by all means contact your employment lawyer and make sure you
understand your rights and your obligations before pursuing any action
or signing off any documents that might limit your rights. Thanks for tuning in,
have a great day.
you
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