Executive Summary: Key Legal and Evidentiary Issues

• The employee claimed unpaid performance bonuses and a promised salary increase that were allegedly withheld without justification.

• The bonus plan lacked clear contractual structure and was subject to employer discretion and performance conditions.

• The employer cited administrative shortcomings and unprofessional conduct as reasons for non-payment.

• Despite performance criticisms, the employer never explicitly warned the employee that bonuses would be withheld.

• The court found the employer’s communications maintained an expectation that bonuses would be paid.

• The salary increase claim was rejected, but most of the bonus claim was upheld due to implied employer commitments.

Factual background and employment context

Olivier Gagné worked for 7112751 Canada Inc. (operating as Kayak Distribution) from early 2019 until his dismissal in September 2020. Hired as an account and marketing manager for Eastern Canada, he was later assigned to manage the company’s retail store. At the time of hiring, he was told a bonus program would be implemented. The program officially took effect in June 2020 but was vaguely defined and not previously applied. Disagreements arose about its terms, especially whether bonuses were tied solely to sales performance or also to subjective criteria such as conduct and administrative compliance.

The performance bonus was structured around a percentage of incremental sales, with different rates for wholesale and retail responsibilities. However, the employer reserved the right to assess employee behaviour and fulfillment of administrative duties as conditions for disbursement. Gagné claimed he met all sales targets and was therefore entitled to the full bonus amounts and a previously promised salary increase.

Employer's justification for non-payment

The employer argued that although Gagné achieved the necessary sales volumes, his work was marred by serious administrative failings and unprofessional conduct. It cited disorganized order handling, poor record-keeping, and a problematic attitude towards colleagues and customers. These issues, according to the employer, justified both his termination and the withholding of bonuses and the raise.

However, the court noted that at no point before his dismissal did the employer inform Gagné that it intended to withhold the bonuses. To the contrary, communications from the employer continued to reference the bonus payments, even offering a potential cash advance. The employer’s ongoing engagement with Gagné regarding bonus calculations created a legitimate expectation that they would be paid.

Employee's working conditions during the pandemic

Gagné explained that his administrative performance suffered due to the extreme workload during the COVID-19 pandemic. He was responsible for both wholesale sales and the retail store, while responding to customer and technical calls, managing logistics, and working over 60 hours per week. The business experienced an unprecedented surge in demand for kayaks, and staff shortages exacerbated the strain. The court acknowledged the challenging conditions and recognized that the deficiencies in Gagné’s performance had contextual explanations.

Judgment on bonus and salary claims

The court accepted the employer’s position regarding the salary increase, finding it was conditional and never formally granted. However, it found the claim for bonuses to be largely valid. It concluded that the employer, by failing to clearly communicate any refusal to pay and by sustaining Gagné’s belief in the bonuses through its correspondence, had effectively upheld the expectation of payment.

The court awarded Gagné a total of $9,878.34, including a $750 account-opening bonus. After deducting $752.20 for a travel expense improperly covered by the employer, the final amount granted was $9,126.14, plus interest and legal fees. The employer’s counterclaim was rejected as unfounded.