Supreme Court decision aggravates termination clause problems for employers – Benefits Canada

Brian Thiessen, KC

Nov 2, 2020

The recent Supreme Court of Canada decision in Matthews vs. Ocean Nutrition Canada Limited, 2020 SCC 26, will have a significant effect on employers who wish to limit employee entitlements under a long-term incentive plan (LTIP) upon termination without cause, Osler partner Brian Thiessen tells Benefits Canada. In his article, author Julius Melnitzer discusses the decision, which concluded that David Matthews was “entitled to a payout under his incentive plan when the company was sold 13 months after he’d been constructively dismissed as vice-president of Ocean Nutrition Canada Ltd.” The article explains how this decision could be problematic for employers, in terms of language that will relieve their LTIP obligations after termination. Brian, a partner in Osler’s Employment and Labour Group, explains the implications for employers.

“Even if we’re fully compliant with the decision, we’re never going to be able to tell clients that they are 100 per cent clear,” Brian tells Benefits Canada. “After all, plaintiffs’ lawyers are paid to find creative ways to get around the language.”

Brian also co-authored an Osler Update entitled “SCC puts employers on notice regarding long-term incentive plans,” that offers an in-depth explanation of the decision and the implications.

To read more of the Benefits Canada article, see author Julius Melnitzer’s article “Supreme Court decision aggravates termination clause problems for employers” in Benefits Canada on November 2, 2020.