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Fighting for a bonus after being terminated

Norman Grosman|

One user wrote in to ask for some legal advice. Our friend and employment law expert, Norman Grosman responds.

Q:

I was recently terminated from my employment, after the fiscal year end, but before bonuses were paid for the prior year. Since I worked the entire fiscal year, and believe my performance was solid, I feel I am entitled to a bonus. My employer, however, says that their plan requires I be actively employed as of the date of payment. Do I have a case?

Answer:

If bonuses were paid for the last fiscal year, and your performance would otherwise have merited a bonus payment, you likely have a reasonably strong argument.

Courts typically reason that if the bonus is an integral part of your compensation program, and you regularly receive one, the fact that you were not physically or actively employed as of the date of payment should not be a valid reason for denying you your bonus, particularly in circumstances where you worked the entire fiscal year and your performance was a contributing factor to the results achieved by your employer.

Many employers, however, have in the past number of years drafted bonus policies, the language of which is designed to deny individuals like you access to the bonus payments unless you are in your chair at the workplace on the date such payments are made. Quite often, those same employers then seek to hide behind their policies, taking the position that you are not entitled to the bonus because their policy says so.

Obviously the optics of that type of denial are poor for the employer, but the amount in question may determine the extent to which you are prepared to pursue payment. One concern that often arises is that while for you the dollar amount of the payment and the logic for receiving it seem clear, for the employer, the threshold issue of defending their policy is one which extends beyond your individual situation, and therefore often motivates the employer to take a tougher position.

It would be wise for you to seek legal advice, in the circumstances, and provide your lawyer with a copy of the bonus policy if one exists.
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Norman Grosman tackles your employment law dilemmas regularly on Workopolis. More information about him and his legal services can be found on his website grosman.com


Category: Employment Law,