Not only that, employees, through their counsel, pay close attention to the conduct of the company in the weeks following.

Employers, after all, have many statutory and civil obligations that remain owing to employees well after the relationship ends. The problem is, most employers rarely deliver on every legal obligation, particularly in executive employment cases.

Take for example the very recent case of Steve Carroll, a 61-year-old global strategic client executive who was terminated in 2024 after three-and-a-half years of service at Oracle Canada.

Carroll’s role was highly specialized, as he led the sales and account management process, and was tasked with growing Oracle’s revenues associated with its products for its TD account.

His base salary was $180,000 plus significant commissions. For example, in 2022, he earned $761,069.79. In 2023, Carroll was having an outstanding year. Between Jan. 1, 2023 and his termination on June 30, 2023, he earned $725,674.08.

Following the termination, Oracle took a hardball approach. It refused to pay Carroll’s commission of $57,740.55 and only paid it to him after he commenced a lawsuit eight months later. Oracle also refused to provide him with a reference letter.

Carroll re-employed, albeit to a lower sales position, eight months after he was let go.

At a summary judgment motion, Carroll was awarded 12 months of pay including his base salary and commissions, averaged over three years. He also received a payment in lieu of benefits at 10% of his base salary and payment in lieu of RRSP contributions at 6% of salary.

Even though he re-employed, eight months after the termination, the court held a 13-month notice period that compensated Carroll for the “ramp-up period” of his new job was necessary to make him whole while he was earning materially less than he did at Oracle.

Notably, the court also awarded him punitive damages in the amount of $57,740.55 for Oracle’s failure to pay Carroll his commissions during the statutory notice period and delaying those payments for eight months without any explanation that withstands scrutiny.

The court held that awarding punitive damages equal to 100% of the amount at issue would provide an adequate level of denunciation and disincentive to deter others from engaging in such conduct in the future.

There are many good lessons and best practices we can mine from this case.

First, the typical practice of employers withholding bonus and commission payments on termination is no longer tolerable, much less acceptable.

Courts do not want employees to be “starved” by employers in an effort to have them accept lower packages on termination.

Second, when an employee re-employs in a position that does not immediately compensate them as highly as in the previous role, courts can extend damages, like in this case. While Carroll reemployed at eight months, since he wasn’t earning equal pay, he still received a 12-month notice award.

If sophisticated, well-resourced global employers are not withstanding the scrutiny of Ontario courts, small and mid-sized employers should take stock of their own termination practices. It’s time to clean things up.

Have a workplace issue? Maybe I can help! Email me at sunira@worklylaw.com and your question may be featured in a future column.

The content of this article is general information only and is not legal advice.