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THE QUESTION
I want to resign and my contract says I need to give two weeks’ notice. I have a scheduled bonus payout coming up in a month, so I’m planning to submit my resignation in two weeks so that my last day is on the day that the bonus is paid out. If my employer decides to walk me out on the day I give my notice and pay out my two weeks instead, would they still have to grant me my bonus? I really want to make sure I get my bonus but I don’t want to work any additional days unnecessarily. What should I do?
THE FIRST ANSWER
Waheeda Ekhlas Smith, barrister and solicitor, Smith Employment Law, Toronto
The least risky option is obviously to wait until you have the bonus in hand before providing notice of resignation. However, if you cannot wait, consider the following. Although not required, you should provide your employer with an e-mail or a letter of resignation indicating your last day of work. This would be helpful to you because, in Ontario, employers ought to accept a resignation on the terms on which they were provided.
In other words, if you provide two weeks’ notice, your employer must honour those terms. Unless your employment contract contains terms that allow the company to waive your notice and only pay you out your statutory minimums (including your accrued wages to the last day of work), your company should not “accept” that resignation and then turn around and walk you out, only paying your two weeks.
A true discretionary bonus can be withheld if you resign. As for a performance-based bonus, whether your employer must award it depends on when you become eligible for it. The terms of your employment agreement and/or the relevant bonus policy would help determine whether you had earned the bonus before you resigned or even whether resigning employees are entitled to a bonus.
Before resigning, it would be worthwhile to have your employment contract and bonus documents reviewed by an experienced employment lawyer.
THE SECOND ANSWER
Jonas McKay, barrister and solicitor, HHBG Lawyers – Employment Justice, Vancouver
Don’t resign until the bonus hits your bank account.
If you have earned a bonus, you should still get that bonus even if the employer walks you out the door. But it isn’t always clear when a bonus is earned.
Your company can set written terms and conditions of a bonus, and define when a bonus is earned. This might include a requirement that you have to be working when a bonus is paid. Or that you don’t earn a bonus if you resign.
It is important to review any written bonus plan or bonus clause in a contract, to see if you have earned a bonus, and if you remain eligible for the bonus in these specific resignation circumstances.
If the bonus documents say you have to be actively working to get the bonus, play it safe and don’t resign until the bonus is paid.
Even if the bonus documents clearly say you get the bonus, you are resigning and are worried about being walked out the door. This doesn’t sound like a company you trust. Assume the company refuses to pay your bonus, and you have to get legal help to fight for it. Even if you win, you’ll probably put less money in your pocket than if you worked those extra two weeks until the bonus is paid.
Grind through the extra two weeks of work, and wait to quit until after you get your bonus.
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