Fired Just Before a Bonus or Vesting Date in Ontario: What You May Still Be Owed

Few things feel worse than being let go days or weeks before a bonus payout, a commission you have already earned, or a vesting date for stock or other incentive compensation. If the timing seems too convenient to be a coincidence, you may be right to be suspicious — and Ontario law gives dismissed employees real tools to challenge that kind of timing.

This article explains the general principles courts apply when an employer's timing looks designed to avoid paying compensation that would otherwise have come due.

Why Timing Raises a Red Flag

Employers generally have the right to dismiss an employee without cause, provided they give proper notice or pay in lieu. What they are not permitted to do is exercise that right dishonestly or in bad faith, specifically to deprive an employee of compensation that had, in substance, already been earned or was about to become payable.

A dismissal that happens to land just before a bonus payment, commission payout, or vesting date is not automatically improper — sometimes the timing really is coincidental, driven by unrelated business reasons. But when the timing is suspicious and unexplained, it invites scrutiny.

The General Rule: Bonuses Can Be Part of Your Damages

When an employee is dismissed without cause, Ontario law generally entitles them to compensation for the notice period they should have received — as if they had continued working through it. Where bonus, commission, or other incentive pay is a regular and integral part of an employee's compensation, courts will often include an amount reflecting what the employee would likely have earned during that notice period, not just base salary.

This means a bonus or vesting event that would have occurred during what should have been your notice period can sometimes still factor into what you are owed, even though your employment actually ended beforehand.

When a Contract Clause Tries to Cut You Off

Employers sometimes include contract or plan language stating that an employee must be "actively employed" on the payment or vesting date to receive a bonus, commission, or equity award — explicitly trying to exclude anyone who is dismissed beforehand, even during a notice period.

Whether this kind of clause actually works depends heavily on how clearly and unambiguously it is worded, and on general principles of contract interpretation that apply in Ontario. Poorly drafted or ambiguous language is often interpreted against the party that wrote it, and courts have shown real skepticism toward clauses that appear designed purely to defeat an employee's damages. Whether a specific clause holds up is a fact-specific legal question, not something to assume either way from the wording alone.

What Courts Generally Look At

• Whether the bonus or incentive was a regular, expected part of compensation, or truly discretionary and unpredictable
• How close the dismissal was to the payment or vesting date
• Whether the employer offered any real explanation for the timing
• The precise wording of any clause purporting to cut off entitlement on termination
• Whether the employee had already substantially completed the work the bonus or incentive was meant to reward

Steps to Protect Your Position

1. Gather your compensation history. Pay stubs, bonus statements, commission structures, and any plan documents help establish what you would likely have received.
2. Get a copy of your full employment contract and any bonus, commission, or equity plan documents. The exact wording of these documents matters enormously.
3. Write down the timeline. Note the dismissal date, the payment or vesting date, and anything the employer said about why the timing worked out the way it did.
4. Do not assume a "must be actively employed" clause is the end of the story. These clauses are often challenged successfully, depending on their wording and the circumstances.
5. Get a lawyer's opinion before accepting a severance offer that appears to exclude bonus, commission, or equity value without explanation.

Frequently asked questions