Canadian HR Reporter

CANADIAN HR REPORTER February 20, 2017 18 NEWS Entitlement on termination Frequently, an employer will rely on a term in its bonus plan re- quiring "active employment" as a condition of eligibility, or stating eligibility will cease in the event of termination of employment whether voluntary or involuntary. Recent case law from the Court of Appeal for Ontario, and the Court of Appeal of Alberta, con- firms such language alone will not achieve its objective and needs to be more clear and explicit if it is to eliminate an entitlement to bonus during the notice period. When employment is termi- nated without cause, the em- ployee is entitled to be put in the same financial position in which she would have been had she been given proper notice. is includes all compensation, benefits and any bonus the employee would have earned during the applicable notice period. In the case of statutory notice, the amount of notice (if any) will depend on the language of the ap- plicable employment standards legislation. In the case of com- mon law notice, in the absence of an employment contract limiting entitlement on termination to the statutory minimum, a court will determine common law or "rea- sonable" notice. Once the reason- able notice period has been deter- mined, the next step is to clarify whether there is any language in the employment contract (includ- ing the bonus plan itself ) that spe- cifically excludes bonus from the entitlement assessment. It is important to remember an employee is entitled to damages at common law for failure to give reasonable notice. e question is whether the employee would have an entitlement to any bonus pay- ment had he been working during that period of reasonable notice. If the objective is that "active employment" be a condition of bonus entitlement, courts appear to require clear and unambiguous language that directly addresses and limits both the common law entitlement to notice of termina- tion and entitlement to bonus-re- lated damages during that period. Absent this type of language, an employee will generally be en- titled to any bonus payment that would have otherwise been paid during the period of notice. Practical strategies While it may seem an employer has few options to protect itself from liability for the bonus enti- tlement of a departing employee. Fortunately, this is not the case. First and foremost, written terms are critical. Whether elec- tronically or with old-fashioned pen and paper, any employee eligible to participate in a bonus plan should be required to ac- knowledge the terms and condi- tions of the plan as a condition of participation. Ideally this is done before the start of the relevant bonus period when objectives are being set and communicated. at said, it's never too late. Even if the bonus period is underway, employers should consult with ex- perienced employment counsel to identify an effective way to imple- ment bonus terms that will meet the organization's objectives. Second, if your organization has an annual bonus program, it is prudent to review the bonus lan- guage yearly to ensure it is current with the law and consistent with actual practice. A written plan does not have to be lengthy or full of onerous legalese. Key terms of eligibility and objectives, as well as reliable protections, can be imple- mented through clear and concise language in a short and effective document. Finally, if your organization is considering the implementation of a new or amended bonus plan, its design and the language used to describe it to employees ought not to be taken lightly. As the courts have now made clear, there is a right way and a wrong way to address these important issues. Shana French and Brian Wasyliw are lawyers with Sherrard Kuzz LLP, one of Canada's leading employment and labour law firms, representing management. Shana and Brian can be reached at (416) 603-0700 (main), (416) 420-0738 (24-hour) or by visiting www.sherrardkuzz.com. Review bonus language yearly BONUSES < pg. 5 to stop it completely, we're just trying to get a gradual change, to get people to think about what they are doing and alternatives that could be available which are much more healthy." People can get scared when they feel like they're messing with a learned tradition like bringing in fruit instead of cake for a birthday, said Merner. "Sometimes, it's just opening up that channel of communica- tion," she said. "(It's about) 'We're going to put healthier choices as the more available option because we know that's what keeps us happy and healthy and focused at work and happier with ourselves,' as opposed to focusing on 'We're taking away the cake because it's not good for you." A lot of the time, there's very little thought about food choices and people just get into bad rou- tines, said Holwegner. "It's 'Well, we've always done it that way, this is our vendor, our supplier, and we didn't see those options on the menu.'" It's about upper leadership team taking the lead by choos- ing healthier options, such as no longer supplying pop, she said. "I would divert junk food budgets and vending machine budgets." Providing fridges and food preparation stations can also help, said Merner. "If we can foster that environ- ment, then it makes it easier to do it, and I think healthy is often the harder choice, so if we can make it easier, then that will help our employees go that route," she said. "Overall, I would find that most workplaces are getting healthier, but it comes back a lot to the conve- nience piece and what's available." One Halifax call centre, for example, provides workers with fruit each day, said Merner. "It's visible, it's easy, it's already prewashed, you grab it and go back to your cubicle…. So it's a nice bonus." Fresh fruit platters or bowls of nuts are good alternatives, said Hunt, who cited the example of Google when it concealed sweets in opaque containers to make them less visible and harder to reach, while healthy alternatives were more prominent. New York employees ate 3.1 million fewer calories over the course of seven weeks. "If you just take them out of eyesight, then people are far less likely to keep dipping into the tin of chocolates or whatever it may be that's on the desk," he said. Happily, the culture is changing — gradually, said Hunt. "It isn't something that we ex- pect to happen overnight — look how long it took for smoking to have a cultural change — but it's the same principle and I think we've just got to keep on drip feed- ing into this." Make it convenient NUTRITION < pg. 9

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