In S. v. Ontario Research and Innovation Network, 2025 ONSC 1839, the Ontario Superior Court of Justice considered whether an employee was entitled to unpaid commissions after his employment ended.
The court found that a draft commission plan circulated by the employer was not binding. However, the employee was still entitled to commissions based on the wording of his employment agreement, compensation confirmation letters, and the employer’s past conduct.
The decision is important for employees who are paid through commissions, bonuses, or other incentive compensation. It shows that compensation rights may come from more than one document, and that employees should keep written records of all compensation-related promises and payments.
What Happened?
The employee worked for a not-for-profit research and education network organization for just over two years. He began as a senior sales employee and was later promoted to a director-level position.
His written employment agreement stated that his compensation included a base salary of $130,000 and that he was “eligible for commission plan, payable based on annual sales results at the end of each fiscal year.” However, the agreement did not explain exactly how commissions would be calculated.
After the employee was terminated without cause, he sued for wrongful dismissal and unpaid commissions. He claimed he was owed more than $600,000 in commissions based on a draft commission plan that had been circulated during his employment.
The Commission Dispute
The main issue was whether the employee was entitled to commissions and, if so, how much.
The employee argued that he had been told he would receive commissions and that the draft commission plan reflected the arrangement that applied to him. The employer argued that the draft plan was never approved or implemented, and that the employee was not entitled to the large commission amount he claimed.
The evidence included three employment confirmation letters issued over approximately 16 months. These letters stated that the employee’s annual compensation included either a 15% commission or up to a 15% commission on salary. The letters were signed by senior leadership and provided to third parties that required accurate compensation information.
The court also considered a previous payment of $15,600. Although the employer later characterized this payment as a bonus, the evidence showed that it was calculated in a way that matched a 15% commission structure based on the employee achieving 80% of his target.
The Court Found the Employee Had a Commission Entitlement
The court found that the employment agreement created an entitlement to commissions. The wording stating that the employee was “eligible for commission plan” had to mean something. It could not simply be ignored or treated as meaningless.
Although the contract did not specify the exact commission amount, the court found that the parties’ conduct helped clarify the employee’s entitlement. The compensation letters, previous payment, and related communications supported the conclusion that the employee was entitled to commissions of up to 15% of his base salary.
This is an important point for employees. Even if an employment contract is unclear, other documents and conduct may help establish what the employer agreed to pay.
The Draft Commission Plan Was Not Binding
Although the employee was entitled to commissions, the court rejected his argument that the draft commission plan was binding.
The plan had been circulated with a “draft” label, and there was no final, approved, or implemented version in evidence. The court found that the plan had not become part of the employee’s employment agreement.
The court also found that the draft plan was too uncertain to enforce. It did not clearly explain important terms, including which customer accounts counted, how multi-year contracts would be treated, and how commissions would be calculated in certain circumstances.
For employees, the lesson is clear: a draft compensation plan is not the same as an approved compensation plan. Employees should not assume that a proposed commission or bonus plan is in force unless it has been finalized and approved.
Reasonable Notice
The employee was terminated without cause after approximately two years and three months of employment. The employer initially took the position that he was not entitled to anything beyond what he had already received, but later conceded that he was entitled to five months’ notice.
The employee sought 12 months’ notice. The court considered the employee’s age, length of service, position, responsibilities, compensation, and the availability of similar employment.
The court awarded six months’ reasonable notice.
Damages Awarded
The employee’s claim for more than $600,000 in unpaid commissions was dismissed. However, the court awarded damages for wrongful dismissal, including salary, benefits, and commission compensation during the notice period.
The total damages award was $58,419.52 before statutory deductions.
Key Takeaways for Employees
Commission language in an employment contract matters.
If an employment agreement says that an employee is eligible for commissions, bonuses, or incentive compensation, that language may create an enforceable entitlement. An employer cannot necessarily treat that wording as meaningless simply because the details were not fully set out.
Compensation letters can be important evidence.
In this case, the employer issued multiple compensation confirmation letters stating that the employee was entitled to 15% or up to 15% commission. The court treated those letters as important evidence of the parties’ understanding of the employee’s compensation.
Employees should keep copies of offer letters, compensation letters, bonus letters, commission plans, emails, and any other documents that describe their pay.
Draft plans are not always enforceable.
The employee could not rely on the draft commission plan to claim more than $600,000 in commissions. The court found that the plan was never finalized and was too uncertain to enforce.
Employees should be cautious about relying on draft or proposed compensation plans. If a commission or bonus plan is important, employees should ask whether the plan has been approved, when it takes effect, and how payments will be calculated.
Employer conduct can help prove compensation rights.
Even though the draft plan was not binding, the employer’s conduct still mattered. The court considered the compensation letters, the previous commission-style payment, and communications about the employee’s compensation.
This means that compensation rights may be established not only by the original employment contract, but also by later documents and conduct.
Employees should ask questions in writing.
If commissions or bonuses are unclear, employees should ask for clarification in writing. They should also ask how payments are calculated and when they will be paid.
Written follow-up is especially important where an employer makes verbal statements about compensation. A short email confirming what was discussed can help avoid disputes later.
Commissions may be owed during the notice period.
When an employee is terminated without cause, damages may include more than base salary. Depending on the circumstances, an employee may also be entitled to benefits, commissions, bonuses, or other compensation they would have earned during the reasonable notice period.
What This Decision Means for Employees
S. v. Ontario Research and Innovation Network confirms that employees may have enforceable commission rights even where a formal commission plan was never finalized.
At the same time, the decision shows that employees cannot always rely on draft plans or informal proposals to claim large commission payments. The court will look at the employment contract, later documents, the parties’ conduct, and whether the alleged compensation terms are clear enough to enforce.
For employees in commission-based roles, the key point is simple: get compensation terms in writing, make sure the plan is final and approved, and keep records of all commission-related communications and payments.
Questions About Commissions, Bonuses, or Wrongful Dismissal?
If you have been terminated and believe you are owed unpaid commissions, bonuses, incentive compensation, or additional severance pay, it is important to understand your legal rights before signing any documents or accepting an employer’s position.
At Monkhouse Law, our employment lawyers represent employees across Ontario in wrongful dismissal, severance pay, commission disputes, bonus disputes, and other workplace matters.
We offer a free 30-minute consultation to review your situation, explain your options, and help you understand what compensation you may be entitled to receive.