In Gale v Fairmont Hot Springs Resort Ltd., 2025 BCSC 2690 (CanLII) Justice Stephens awarded a 9 months notice period to a 63 year old Director of Sales and Marketing with 3.4 years service. The plaintiffs’ compensation was a base salary of $142,00 plus a bonus up to 25% of his base.
The Plaintiff was given notice of termination on February 8, 2024 and was given working notice until February 29, 2024.
The fiscal year end of the Defendant was November 30, 2023 and was actually paid out in February of 2024. For the first 6 months of the fiscal year he was already paid a bonus of $52,300 but was paid nothing for the last 6 months of the fiscal period. His payout for the first 6 months of the fiscal year was three times the maximum entitlement. In the previous 2 years, his bonus was equal to 97% of the 25% maximum. The total bonus received in the 30 months that he achieved a bonus averaged $4,000 per month.
The relevant part of the employment contract regarding the bonus plan was as follows:
9. SLT Incentive Plan: You will be eligible to participate in the Company’s SLT Incentive Plan. The SLT Incentive Plan provides for a fiscal year annual performance incentive of up to 25% of your Base Salary (“Incentive Bonus”) subject to the achievement of the annual goals and objectives that are to be annually agreed to between the Company and you and approved by the Company’s Board of Directors. Whether any Incentive Bonus is issued and the amount of any such Incentive Bonus shall be at the sole discretion of the Company and any Incentive Bonus issued in any one year does not mean that you will be entitled to or receive an Incentive Bonus in any other year. Eligibility for any Incentive Bonus shall be subject to you not having ceased employment with the Company, regardless of the reason for or manner of termination, during the year for which the Incentive Bonus would be payable and for greater certainty, is not earned until the date that such Incentive Bonus is determined by the Company to be payable to you.
The first issue was whether the Plaintiff was entitled to a bonus for the period June 8, 2023 to November 30, 2023.
To me it seems obvious that the Plaintiff should have received this bonus because he qualified under the terms of the contract in that he was employed not only as of November 30 2023 but also at the time of payout in February as he was on actual working notice until February 29, 2024.
This what the Judge said :
[13] On February 8, 2024, Fairmont wrote to advise Mr. Gale that Fairmont had terminated Mr. Gale’s employment on a without-cause basis. The termination letter provided for a period of working notice of three weeks, from February 8 to February 29, 2024, and notified him that his company benefits, including health and dental insurance, would be terminated effective February 29, 2024. The termination date was February 29, 2024.
However the Judge determined that in order to qualify for the bonus there had to be an analysis of the entitlement to a bonus over the notice period. This is what the Judge said on that issue.
[97] Damages, thus, must be awarded for bonuses earned during the notice period if the employee demonstrates that a bonus was an integral part of the employee’s compensation, having regard to four factors that are helpful in determining whether this is the case in any particular situation:
(1) A bonus is received each year although in different amounts;
(2) Bonuses are required to remain competitive with other employers;
(3) Bonuses were historically awarded and whether the employer had never exercised his discretion against the employee; and
(4) The bonus constituted a significant component of the employee’s overall compensation.
The Judge found that all four factors applied so he awarded a bonus for the period ending November 30, 2023.
However, since a 9 months notice period would only take the employee to November 9, 2024, the Plaintiff was not entitled to any further bonus after November 30, 2023. In fact the plaintiff would have had to be awarded a notice period ending February 28, 2025 ( 14 months ) to get any bonus over the notice period or the stub period that he worked from December 1, 2023 to February 29, 2024.
It isn even more surprising how the Judge calculated the bonus owing for the last 6 months of the fiscal year. The Judge completed ignored the fact that in the previous 6 months the plaintiff received an extraordinary high bonus of $52,300 and instead simply took the average of the prior 2 complete years where he was paid 97% of the 25% as set out in his contract. This is what the Judge said :
[107] Nevertheless, this bonus amount was paid for the first six months of the 2022/2023 year. There is no evidence to suggest the same amount would have been paid to Mr. Gale for the last six months of that fiscal year as well. However, there is also no evidence that Fairmont had determined that the bonus given in June 2023 satisfied Mr. Gale’s bonus for the entirety of the fiscal year. Instead, the wording of the June 7, 2023 letter assigns the bonus to only the first six months of the year.
[108] Given the history of Mr. Gale’s previous bonus amounts and their quantum, and having regard to the maximum bonus for one year under the Employment Agreement of 25 percent of base salary, I find that Mr. Gale has an entitlement to a bonus for the second six months of the 2022/2023 fiscal year calculated as 97 percent of the maximum bonus for that six-month period, being 97 percent of $17,750, equalling $17,217.50 (97 percent x 0.5 x 0.25 x $142,000).
In essence the Plaintiff got a below average bonus for the period that he actually worked and zilch bonus over the notice period.
This was a similar result as in Adelman v. IBM Canada Limited, 2026 ONSC 420.
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