Incentive during notice is the rule and not the exception

In a recent decision, the Supreme Court of Canada clarified the law regarding the payment of incentive compensation during a period of reasonable notice.  The counter-intuitive approach to incentive compensation set out in the Employment Standards Act has always provided for payment of incentive compensation during the statutory notice period where incentive payments were made in the twelve weeks preceding the termination of employment.  There had been some conflation of legal tests in considering whether a clause in an employment agreement or incentive plan was sufficient to take away an employee’s greater common-law entitlement to incentive payment during a period of reasonable notice.  The law is now quite clear.  The starting point of the analysis is that an employee is entitled to incentive compensation at common-law.  Many existing exclusionary clauses will fail to deny employees such compensation.  There is room for additional recovery by employees under further claims not yet determined by Courts including, without limitation, employer bad faith.