Employee Preformance/ Bonus

[Doaa Elrayes]

#94619

Forum: Private

According to Ontario’s Human Rights Code, what are the legal implications if an employee is denied a bonus—one that was not mentioned in their employment contract—due to alleged poor performance, while their team members receive it, especially if there are no documented records in HR of misconduct or lack of performance? Does the law address this situation

[Haley O’Halloran]

#94626

Under Ontario’s Human Rights Code, if an employee is denied a bonus due to alleged poor performance, but their team members receive it and there is no documented record of misconduct or performance issues, several potential legal implications arise:

Discrimination: The Ontario Human Rights Code prohibits discrimination in employment on various grounds, including race, gender, disability, sexual orientation, and other protected characteristics. If the employee is being treated unfairly due to one of these protected grounds, it could be seen as discriminatory.

Failure to Apply Fair and Consistent Standards: If the bonus is typically awarded based on performance but there is no documentation or evidence to show that the employee’s performance was subpar, the employer may be acting arbitrarily or without clear justification. The employee could argue that the decision was unfair or inconsistent, particularly if their colleagues received the bonus despite similar or poorer performance.

Constructive Dismissal: If the denial of the bonus leads to a significant and unfair change in the employee’s compensation or terms of employment, the employee may argue that they have been constructively dismissed. This occurs when an employer makes a significant, unilateral change to the terms of employment, essentially forcing the employee to resign. In this case, the reduction in compensation or perceived unfair treatment could be seen as a change to the terms of employment.

Breach of Implied Terms of Good Faith and Fair Dealing: Under employment law in Ontario, there is an implied duty of good faith and fair dealing in every employment relationship. If the employee feels that the denial of the bonus was unjust or based on unfounded allegations of poor performance, it could be seen as a breach of this implied duty. Employers are expected to treat employees with fairness, respect, and transparency.

Lack of Documentation and Due Process: If the employer has made a decision based on alleged poor performance but has no documented evidence of misconduct or performance issues, it may indicate a lack of due process. An employer is generally expected to document and communicate performance issues clearly, especially if they are used as a basis for compensation decisions like bonus awards. Without such documentation, the employee might have grounds to claim the decision was not based on objective or justifiable criteria.

The employee in question could:
Request clarification from you regarding the reasons for being denied the bonus, and ask to see any documented performance records.
File a human rights complaint with the Ontario Human Rights Tribunal if they believe the denial is due to discrimination.
Seek legal advice on whether there has been constructive dismissal or a violation of employment standards.
Ultimately, there could be legal ramifications when handing out a bonus to some employees on a team but not all. Seek legal counsel to correctly navigate this process, document everything, and always try to lead with fairness first.

-HRInsider Staff

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