Month: August 2026

n McElgunn v Vermilion Energy Inc., 2026 ABKB 531 (CanLII) Justice Simard had to decide what date should be used to determine the value of a stock option that was improperly denied to the plaintiff.

[10]        Vermilion argues that I should use the $17.14 share price on the April 1, 2023 vesting date. It says that this award would fully compensate Ms. McElgunn for what she lost, and that to award damages based on a higher share price would speculatively overcompensate her, since there is no evidence about her holding and trading practices regarding earlier Vermilion share awards.

[11]        Ms. McElgunn says that the Shares should be valued using the highest trading price after the April 1, 2023 vesting date for which there is evidence. This was $21.60, the trading price on September 11, 2023. She says this award would properly give her the benefit of the doubt as the wrongfully terminated employee, giving effect to the principle that where the employer’s conduct deprived the employee of the choice of when to sell shares, the employer should bear the burden of that conduct. In the alternative, Ms. McElgunn submits that the average of the vesting price and the highest trading price (which would be $20.11) would also be a fair award, in recognition of the fact that no one can now know when she would have sold her shares, and it is unlikely that she would have sold at the very peak of the market.

The Court decided that the vesting date was appropriate in this case.

Vermilion’s breach was to not provide the Shares to Ms. McElgunn on April 1, 2023. But for that breach, she would have had the Shares on April 1, 2023. However, Ms. McElgunn bore the onus of leading evidence to prove what she would have done with the Shares, had she received them at that time. There was nothing preventing her from introducing evidence on that point in the Arbitration, alongside the detailed evidence that was introduced about the post-April 1, 2023 share prices. However, Ms. McElgunn did not enter any such evidence. Vermilion did nothing to prevent her from leading that type of evidence.

As a result of this evidentiary gap, it would be completely speculative for me to make any finding that Ms. McElgunn would have employed any particular strategy and sold the Shares at any particular time, for any particular price.

In these circumstances, there is no legal or equitable basis on which I could give Ms. McElgunn “the benefit of the doubt” or make Vermilion bear the consequences of her failing to satisfy her onus by leading evidence on this point.

My Comments:

This case makes it clear, that absent evidence to the contrary, the proper date of valuation is the vesting date.

This makes sense for a number of reasons:

First and foremost it creates certainty, something that is gravely missing from employment law.

Second it is neutral. Sometimes the price after vesting goes up and sometimes it goes down.

Third, if the Plaintiff truly thought that the price would go up after the vesting date, there is nothing preventing them from going into the market ( assuming the company is publicly traded ) and buying the shares themselves.

I am only aware of one case where evidence was actually led to show that in the past the Plaintiff did not sell the shares on the vesting date . In Adelman v IBM ( 2026 ONSC 420) the evidence showed that in the past the Plaintiff held on his IBM shares an average for 402 days. Therefore the Court valued the shares 402 days after vesting.

For a copy of this case email me at barry@barryfisher.ca

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In  2250898 ONTARIO INC., o/a FERRARI AND ASSOCIATES INSURANCE & FINANCIAL SERVICES INC., v MATTHEW PEPE and MJP COMMERCIAL CORPORATION, ( ONSC 2026 4676) Justice Leach has a situation where an insurance salesperson left his job after a few months. In that period of time he had received a draw against commissions which was about $33,000 more than he  had actually earned in commissions.

His former employer sued for the overpayment .

The Small Claims Court Deputy  Judge found in favour of the former employer.

The former employee appealed to Divisional Court.

The relevant clause was as follows:

Compensation: 

As a result of this employment offer, you will be paid a draw against commissions for the first three (3) years in the amount of $90,000 annually, paid on the 15th of every month, based on the following commission structure. 

The Judge pointed out that were two types of draws against commssion;

While there is little doubt that reference to a “draw against commission” generally refers to a compensation payment structure whereby a salesperson is given money in advance of it being earned by future sales earnings, (thereby lending a degree of financial stability and support for new hires), the more fundamental legal reality, lying at the heart of much of the caselaw in this area, is that not all “draws against commission” are intended to have the same character in the event paid draws exceed earned commissions. Some are intended to be “recoverable draws”, while others are intended to be “non-recoverable” draws. In particular:

1. 1. Some situations involve draws against commissions that are intended to be generally “recoverable” and repaid by the salesperson to his or her employer via whatever funds are required in that regard, to the extent the salesperson’s sales do not cover the amount or amounts paid in advance by the employer. In such cases, a “recoverable draw” is an advance that essentially operates like a short-term loan, intended to be repaid in any event from the salesperson’s corresponding earned commissions to the extent there are any, (via a reconciliation calculation performed in that regard), and otherwise from the salesperson’s general resources; i.e., from a source of funds other than earned commissions. If the salesperson’s earned commissions are less that the paid draw amounts, the salesperson owes the deficit back to the payor in any event; i.e., with the deficit constituting a repayable debt to be addressed from the debtor’s general assets like any other debt. Such an intended arrangement effectively casts the overall financial risks of the employment relationship on the salesperson; i.e., exposing such a salesperson to potential debt accumulation and repayment pressure and stress. 
   2. Other situations involve draws against commissions that are intended to be “non-recoverable”; i.e., essentially operating as a guaranteed minimum payout to the salesperson, while the salesperson retains an incentive to generate commission in excess of that payout to receive augmented compensation through an agreed commission structure. If the employee fails to sell enough to generate commissions sufficient to cover the paid draw amount or amounts, the salesperson does not have to pay the difference back, and the employer payor absorbs the loss. In other words, repayment of such draws is to be addressed solely via earned commissions, to the extent they exist, but do not otherwise constitute a debt repayable from the salesperson’s other resources. Such an intended arrangement effectively casts the overall financial risks of the employment relationship on the employer, which nevertheless might be willing to assume such risks to promote other business objectives; e.g., to attract top-tier sales professionals looking for financial stability, (by offering guaranteed baseline support via a more traditional “salary plus commission” type of compensation arrangement), when such professionals otherwise might be inclined to reject “pure commission” employment lacking a financial safety net.

How then do we determine which type of draw agreement is applicable ?

This judgement gives us some guidelines :

In my view, this matter should have been relatively straightforward and easy to decide, insofar as it effectively stood on all fours with the decision rendered by the Superior Court of Justice in Holman Design Ltd. v. Desmarais-Worgan, supra, which the Deputy Judge himself cited. Without limiting the generality of the foregoing, including the more specific and detailed reasons outlined above:

The question of whether the defendants had an obligation to repay paid draws exceeding earned commissions from any fund other than earned commissions was to be decided by the specific intention of the parties to this particular employment relationship, rather than any supposed legal presumption. 

The clear wording of the parties’ agreement in this case specified, in relation to the compensation arrangement, that the draws to be paid were “paid against commissions”, (i.e., the contemplated commissions to be earned), without the contract, drafted by the plaintiff employer, going on to specify that the defendants had any obligation to repay draws paid in excess of any such earned commissions in any event from a fund other than such earned commissions.

 Such an obligation cannot be imposed on an employee such as Mr Pepe after the fact, especially when doing so would “overwhelm” the actual wording the parties chose to employ in their agreement, and represent a deviation from the fundamental principle that the interpretation of a written contractual provision must always be grounded in the text, read in light of the entire contract. In this case, the arrangement expressly agreed upon by the parties specified that draws were to be paid “against commissions”, and therefore repayable from such earned commissions. No other term, enabling the plaintiff to recover such draws from any other source, was included in the agreement. Nor can such a term be implied, particularly when one has regard to the “entire contract” provisions expressly agreed upon by the parties. 

Once it is recognized that there is no legal obligation on the defendant to repay paid draws exceeding earned commissions in any event from funds other than earned commissions, and that the defendants accordingly are permitted to retain draws paid in excess of the commissions earned, Mr Pepe effectively will have received compensation for his employment exceeding the minimum wages and vacation pay to which he was entitled by virtue of the ESA, and the concerns about violation of the ESA’s guarantees regarding payment of such minimum wages and vacation pay fall away. 

This last point regarding the ESA requires some explanation. If the employee had been required to pay back the $33,000, he would have actually received less than the ESA minimum wage. The Small Claims Court Deputy Judge determined that the employee was actually an independent contractor and therefore the ESA did not apply. The Divisional Court Judge found that to be an obvious error as neither of the parties argued that point and in fact both sides conceded that there was an employment relationship. Moreover the contract used the term “employee ” multiple times.

I note that the actual citation on the case sent to me by counsel is 2016 ONSC 4676. I assume that this is a typo because the case was argued on October 3, 2025. I have therefor listed the citation as 2026 ONSC 4676

For a copy of this decision email me at barry@barryfisher.ca

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In Wigdor v. Facebook Canada Ltd., 2026 ONCA 572 , Justice Copeland made a number of important decisions about the relationship between RSU’s ( Restricted Stock Units ) and the law of reasonable notice :

A) Sections 60 and 61 of the ESA require the same calculation of what is to be paid to the dismissed employee

I agree with Dr. Wigdor that, properly interpreted, s. 61(1)(a) of the ESA requires that the lump sum payment to which an employee is entitled where pay is provided in lieu of working notice must be calculated on the basis that there are no alterations to the terms or conditions of employment during the statutory notice period.

Section 61(1)(a) defines the lump sum payment to which an employee is entitled if termination is without notice or is with less notice than required under ss. 57 or 58 of the ESA.3 Section 61(1)(a) clearly defines the amount of the payment in lieu of notice as: “a lump sum equal to the amount the employee would have been entitled to receive under section 60 had notice been given in accordance with that section” (emphasis added). The text of s. 61(1)(a) is clear that the lump sum must be “equal to” the amount the employee would have been entitled to had they been given working notice under s. 60. 

The trial Judge had made a distinction between the compensation that would flow from a working notice termination and a pay in lieu of notice termination, The OCA says that was an error and the monetary result must be the same .

B) In determining the validity of the contract, we look at it time of formation of the contract not what the employer did at the time of termination :

The application judge only considered whether the RSU termination provisions complied with the ESA through the lens of a termination where pay in lieu of notice is given because, apart from four days of working notice, Dr. Wigdor was given pay in lieu. By focusing only on circumstances where pay in lieu is given, the application judge failed to consider the effect of the terms of the contract at the time the contract was entered into. In other words, in this case, if the terms of the RSU Agreements purporting to deprive terminated employees of vesting of RSUs during the notice period for a termination contravene the ESA because they alter a term or condition of employment, they do so at the time the employment contract is entered into whether for a particular employee a later termination is with working notice or pay in lieu. 

C) The Court did not decide whether equity based compensation was ” wages ” within the definition in section 1 (1) of the ESA:

It is not necessary to address this issue to decide this appeal, and I decline to do so. Dr. Wigdor’s argument is that the entitlement to RSUs constitutes a “term or condition of employment” within the meaning of s. 60(1)(a) of the ESA.5 5 Dr. Wigdor made submissions, in the alternative and in response to the intervener’s submissions, on the “wages” issue. However, his primary position was that it is not necessary to decide if equity-based compensation is “wages” to decide this appeal. As outlined above, I would decide the appeal on this basis. Whether the RSU entitlement also constitutes “wages” need not be decided. The question of whether equity-based compensation falls within the definition of “wages” in the ESA is better left to an appeal where its resolution is determinative. I would add that, depending on the evidentiary record, it may be the case that the answer is more nuanced than a blanket determination that all forms of equity-based compensation are or are not “wages” under the ESA. 

D) Savings Language in the Clause Does Not Work:

The 2021-2023 RSU Agreements also purport to end vesting immediately upon termination. Although the 2021-2023 RSU Agreements appear to attempt to include a saving provision with the language “unless explicitly required by applicable legislation”, there is nothing “explicit” in the ESA about continued vesting of RSUs during the statutory notice period. The saving language is not engaged. 

E) Just Because the plaintiff received some of  these RSU’s in part because of a commercial transaction that does not mean that the ESA does not apply:

The only reasonable conclusion on the record in this appeal is that Dr. Wigdor’s RSU entitlements were part of his employment compensation. As I have outlined above at paras. 107, 118-19, the employment agreement and the RSU Agreements structure Dr. Wigdor’s RSU entitlements as employment compensation. Further, the RSUs that vested during the time Dr. Wigdor was employed by the Respondents were treated as employment income. Thus, the ESA applies to the RSU entitlements.

To the extent that UTS is advancing an argument that in the context of a commercial contract, the ESA provisions do not apply, we disagree. There is nothing in the ESA that indicates that it is inapplicable in employment relationships connected to commercial transactions. 

F) The ruling innMikelsteins v. Morrison Hershfield Limited, 2021 ONCA 155, is not applicable in this case :

Mikelsteins is distinguishable from the circumstances of this appeal. Mikelsteins concerned an “employee-owned engineering firm” that allowed certain employees to purchase shares in the parent corporation using their own funds. When an employee decided to purchase shares, their rights regarding the shares were determined by the terms of the shareholders agreement. This court held that receipt of shares was not employment compensation subject to the ESA for two reasons: (1) because the employee had to purchase the shares using their own funds; and (2) because the employee’s rights as a shareholder in relation to the shares, once the employee made the choice to purchase the shares, were determined under the shareholders agreement, not the employment contract: Mikelsteins v. Morrison Hershfield Limited, 2019 ONCA 515, at paras. 2-6, 12-19; Mikelsteins v. Morrison Hershfield Limited, 2021 ONCA 155, at paras. 11-13, leave to appeal refused, [2019] S.C.C.A. No. 363. 

[132] By contrast, as I have outlined above, in this case the RSU entitlements were a form of employment compensation that automatically vested in consideration of ongoing employment. 

My Comments;

This is a very important case that should be read in its entirety.

By the way,  the RSU issue was worth $4,711,647 USD or over $6.5 million  of our dollars

To obtain. copy of this case, email me at barry@barryfisher.ca

To book a mediation, go to www.barryfisher.ca

To access the Wrongful Dismissal Database, go to www.wddonline.ca