Supreme Court Awards Over $1M Damages for Pay in Lieu of Notice
October 2020 Charity & NFP Law Update
Published on October 30, 2020

By Barry W. Kwasniewski

Employers will have to write strictly worded and legally precise termination clauses if they aim to exclude entitlements to financial incentive bonuses for executive employees who have recently left their company. In Matthews v Ocean Nutrition Canada Ltd., a judgment rendered on October 9, 2020, the Supreme Court of Canada (“SCC”) restored $1,086,893.36 in damages, for payment in lieu of notice, awarded in a 2017 trial to a former employee as a result of a Long Term Incentive Plan (“LTIP”) agreement with his employer. The SCC overturned the 2018 Nova Scotia Court of Appeal’s holding that excluded the LTIP payment, and the issue pivoted on whether that money would be included in a reasonable notice period at common law, considering the terms of the employment contract. This decision is relevant to charities and not-for-profits that include bonus and incentive programs as part of employee compensation.

For the balance of this Bulletin, please see Charity & NFP Law Bulletin No. 479.

Read the October 2020 Charity & NFP Law Update