In a recent summary judgment motion (Kraft v Firepower Financial, 2021 ONSC 4962), Daniel Lublin successfully obtained 10 months’ compensation for a 34-year-old niche salesperson with 5.5 years of service in the financial industry. Importantly, Plaintiff was also awarded unpaid commission (i.e., $77,559) on a deal that he had completed all his work on before termination, although the deal did not close until six months following the termination.
Kraft v Firepower Financial: Court Increased Notice Period by One Month Due to COVID-19 Pandemic
Defendant’s position was that the Court should take no account of the economic shutdown due to the pandemic, as the termination took place before the Ontario government declared an emergency. However, this contention was quickly dismissed by the Court.
Further, the Court commented that the Covid pandemic should increase the severance period for the Plaintiff by one month stating:
“There is evidence that the pandemic impacted on the Plaintiff’s ability to secure new employment. In light of that evidence, he deserves to receive at least somewhat above the average notice period. I would peg the figure at 10 months, or one month more than the average for his circumstances during non-pandemic times.”
With respect to the unpaid commission claim, the Court agreed with Plaintiff of the Kraft v Firepower Financial that there is an implied term requiring payment of commissions for work performed prior to termination unless a written contract or sales incentive plan contains proper and legal language to the contrary.
This case of Kraft v Firepower Financial is a big win for employees in a similar situation who have to find alternate employment during the COVID-19 pandemic and were denied their commission effected before the termination. Employers also need to be aware of the potential risks of denying terminated employees’ unpaid commission simply because the transaction closes after the termination.
To better understand your workplace rights during these unprecedented times, we encourage employees and employers to seek legal advice. We at Whitten & Lublin are happy to provide insight and advice into your specific circumstances. If you are looking for employment lawyers and would like more information about what Whitten & Lublin can do for you, please contact us online or by phone at (416) 640-2667 today.