Courtroom Victory: $77K Commission and 10 Months’ Pay Won in Kraft v. Firepower

How Dan Secured 10 Months’ Pay and $77,000 in Post-Termination Commissions for a Wrongfully Terminated Employee

In a strong win for employee rights, employment lawyer Daniel Lublin successfully represented the plaintiff in Kraft v. Firepower Financial Corp., securing 10 months’ severance, plus full entitlement to commissions, vacation pay, and a share of the company’s bonus pool.  Most notably, the Ontario Superior Court awarded the plaintiff $77,000 in commissions for a deal that closed after termination rejecting the employer’s attempt to withhold commissions on deals signed prior to termination but not yet paid.

The Facts

• The plaintiff, a commissioned mergers and acquisitions (M&A) advisor, earned a base salary, plus bonuses, benefits, and commission on successful deals.
• In March 2020, at the onset of the COVID-19 pandemic, he was terminated without cause.
• Before dismissal, he sourced and finalized a major M&A opportunity with Arzon Ltd, although the deal did not pay out until afterwards.
• The employer refused to pay the commission on the Arzon matter, arguing that the Plaintiff needed to be employed when the deal was paid out, although this was a limit not grounded in the employment contract.
• The Arzon deal closed six months post-dismissal, generating over $77,000 in commission.

The Legal Issues

Daniel Lublin argued that:

• The plaintiff was entitled to reasonable notice, including salary, benefits, vacation, and bonus especially given the challenges of job hunting during the pandemic.
• Commissions must be paid if the underlying work was done before termination and the deal closed during the notice period.
• The employer’s cut-off on the commission was arbitrary and unenforceable.

The Court’s Decision

The Court agreed with the Plaintiff and made the following decision:

• The plaintiff was entitled to 10 months’ notice, reflecting his role, tenure, and the extraordinary economic conditions due to termination at the outset of COVID-19.
• The employer’s cut off on commissions had no contractual basis and was rightly dismissed.
• Relying on Matthews v. Ocean Nutrition Canada Ltd., the Court held that commissions are payable if the work was substantially performed prior to termination even if payment occurs afterward.
• Because the Arzon deal generated fees within the 10-month severance period, the commission payable to the Plaintiff was wrongfully withheld.
• The plaintiff also received a portion of the annual bonus, calculated based on his two-year earnings average.
• Finally, the plaintiff was also awarded a sizable portion of his legal costs.

The Outcome

The plaintiff was awarded:

• 10 months’ pay in lieu of notice
• $77,559 in commissions from the Arzon deal
• Vacation and holiday pay
• Bonus pool compensation
• Legal fees

Key Takeaway

This ruling reinforces an important principle: employees can be entitled to incentive compensation for deals or work completed before termination, even if payment is delayed until afterwards. Employers cannot impose arbitrary limits that undermine common law rights and need to have well-drafted employment contracts or other plan terms in order to justify attempting to withholding commissions or other incentive payments not yet paid out.

With strategic and compelling advocacy by Dan, the Court recognized not only the legal entitlements at play, but also the real-world difficulties of job loss during a global crisis.

Terminated? You May Be Owed More Than You Think.

If you’ve been let go and believe you’re owed commissions, bonuses, or compensation for work already completed, don’t assume your rights end upon your job loss. As Kraft shows, you may be able to claim compensation for work performed prior to termination but not yet paid to you.

Speak to an experienced employment lawyer who can assess your situation and fight for what you’re rightfully owed. Book a consultation online or by phone at (416) 640-2667.

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