Owed Unpaid Bonuses? Its Not Too Late For A Lawsuit

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Maybe you didn’t know you were entitled to a bonus. Maybe you didn’t want to have that potentially career killing conversation with your employer. These are just two of the reasons why you may not have pursued unpaid bonus amounts owing to you.

But how long is too long to wait? The Limitations Act, 2002 generally requires that you sue within two (2) years of discovering a claim. Does this mean you can’t recover against a current or former employer for bonuses you should have received more than two (2) years ago? Not necessarily.

In a recent motion before the Ontario Superior Court of Justice (leave to appeal denied by the Divisional Court), Brown Litigation persuaded the court not to dismiss our client’s claims for bonuses payable more than two (2) years before the start of the lawsuit. In agreeing to postpone the determination of the limitation period to trial, the court found the limitation period had not clearly expired and relied on the following cases:

Saltsov v. Rolnick[i] – The Limitation Period May Not Commence Until Resignation or Termination

In Saltsov, the court acknowledged that employees could not reasonably be expected to sue their employers while still employed with them, as doing so would negatively impact their employment.

The motion judge in our client’s case applied the law in Saltsov and stated that “it would have been neither workable nor fair to expect [our client] to have jeopardized his job by suing for bonus while still actively employed at [his company].” According to Saltsov, the limitation period for your unpaid bonus claims may be deemed to have commenced not when the bonuses were payable, but rather on the date of your resignation or termination.

Novak v. Bond[ii] – The Court Will Take Individual Circumstances into Account

The Supreme Court of Canada confirmed in Novak that individual circumstances can be considered in determining when a plaintiff should have known to sue. The court stated that, “in some cases, the plaintiff’s own circumstances and interests may be so compelling that it cannot be reasonably said that he or she could bring an action within the prescribed time period,” also noting that “people ought to be encouraged to take steps short of litigation to deal with their problems,” and “they should not be compelled to sue when to do so runs counter to a vital interest.”

The motion judge in our client’s case considered Novak in light of our client’s position as an employee of the defendant, and stated that “an employee is in a vulnerable situation and entitled to a subjective appreciation of his circumstances in connection with understanding his realistic and reasonable alternatives in responding to conduct and decisions affecting him or her.” Novak mirrors section 5(1)(b) of our Limitations Act, 2002, and the court accepted that our client may not have personally discovered that a claim was necessary to collect the bonuses.

Halloran v. Sargeant[iii] – Fraudulent Concealment Precludes a Limitation Defence

It is well established at law that defendants cannot rely on the limitation defence where they have engaged in fraudulent concealment. In Halloran, the court ruled that an employee’s claim for termination pay was not out of time due to fraudulent concealment on the part of his employer. The employer failed to advise the employee of certain key facts. It was stated that acts amounting to fraudulent concealment may be as minimal as “a mere failure to inform.”

The motion judge in our client’s case cited Halloran in concluding that our client’s employer had engaged in fraudulent concealment by failing to provide sales figures that our client needed to determine and calculate his potential bonus entitlement. It follows from this decision that if the information necessary to determine your bonus entitlement was not made available to you by your employer, the limitation period may not apply to your unpaid bonus amounts.

Final Thoughts

When it comes to a claim for unpaid bonuses, while you should always be encouraged to bring forward known claims in a timely manner, there are certain exceptions to the usual two (2) year limitation period. Whatever your situation may be, don’t assume it’s too late to sue for the bonus amounts owing to you, consult legal counsel.

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