Case snapshot
At a glance
- Case
- Can Dividends on RSUs Be Claimed in an Ontario Wrongful Dismissal?
- Court / Tribunal
- Ontario Superior Court of Justice
- Citation
- 2026 ONSC 4238 ↗
- Date
- July 21, 2026
- Area of law
- Employment Law
- Key issue
- Whether dividends accruing on restricted share units granted under a Long-Term Incentive Plan form part of the compensation recoverable in a wrongful dismissal claim.
- Outcome
- The court rejected the employer's objection and ordered that dividends connected to the RSU grant be included in the damages award, with supplemental reasons issued to clarify the trial decision.
- Why it matters
- Employees who lose RSU-linked dividends when they are terminated may be entitled to recover those amounts as part of their wrongful dismissal damages, not just the value of the units themselves.
Legal principle
The rule from this case
When a court awards damages for wrongful dismissal that include restricted share units under a Long-Term Incentive Plan, the dividends that naturally flow from those units are part of the same entitlement. A court does not need to address dividends in exhaustive detail in its main reasons if the plaintiff's evidence clearly identifies them and the dividend payment is a direct consequence of granting the RSU. Ontario courts can also issue supplemental reasons after a trial judgment to clarify calculations or include items that were properly before the court but not explicitly addressed in the original decision. Both parties are given the opportunity to make further submissions before the court finalizes the order, and the deadline for costs submissions runs from the date of the supplemental endorsement, not the original judgment.
Important limits
What this does not mean
This decision does not mean that every employee who loses unvested RSUs or other equity compensation will automatically recover dividends. The outcome depends on the specific plan documents, the evidence the employee put before the court, and whether the dividend entitlement flows logically from the equity award at issue. Employees who do not document their full LTIP entitlements — including dividend provisions — may not be able to recover them. The case also does not stand for the proposition that supplemental reasons can be used to introduce entirely new claims or arguments that were not part of the original trial. Supplemental reasons are a limited procedural tool for clarifying and completing the record on matters already in play, not a second chance to litigate issues that were abandoned or overlooked.
Can you recover RSU dividends after being wrongfully dismissed in Ontario?
Yes — if dividends on restricted share units were part of your Long-Term Incentive Plan and the evidence was before the court, an Ontario judge can order those dividends included in your damages award. That is exactly what happened in Khatib v. GoEasy Ltd, 2026 ONSC 4238 (CanLII), a supplemental endorsement issued by the Ontario Superior Court of Justice in July 2026.
This article explains what the court decided, why it matters for employees with equity compensation, and what you should do if you have been terminated and believe your LTIP entitlements were not fully paid out.
What is a Long-Term Incentive Plan and why does it matter on termination?
A Long-Term Incentive Plan (LTIP) is a form of deferred compensation that employers use to retain employees over time. RSUs — restricted share units — are a common component. Each RSU typically converts into a share of the company (or its cash equivalent) once a vesting condition is met, such as staying employed for a set period.
When an employee is terminated without cause, the question becomes: which unvested RSUs, and which related benefits, should be included in the damages calculation? Our Ontario employment lawyers regularly see disputes about exactly this issue, particularly at companies that use equity compensation as a significant part of total pay.
What did the court decide about dividends on RSUs?
The court confirmed that dividends tied to a specific RSU grant are a natural consequence of that grant — they flow automatically once the RSU is awarded. Because the employee’s evidence (presented in charts at trial) clearly identified the dividend amounts, and because the original trial decision had already determined the employee was entitled to the RSU grant itself, there was no principled reason to exclude the dividends.
GoEasy Ltd. objected to including the dividends, but the court rejected that objection. The order was amended to reflect the dividend entitlement connected to the RSU grant.
What are supplemental reasons in an Ontario court proceeding?
Supplemental reasons are a procedural tool that allows a judge to clarify, complete, or correct a judgment after it has been issued. They are not an appeal and they do not reopen the entire case. In this decision, the court used supplemental reasons to address calculation items that had been placed before it at trial but were not explicitly dealt with in the original judgment.
Both parties were given the opportunity to make further submissions before the supplemental endorsement was finalized. The court also confirmed that the deadline for submitting costs arguments runs from the date of the supplemental endorsement, not the original trial decision. This is a practical point that matters for anyone managing post-trial timelines.
Does an employer’s LTIP plan document control what you can recover?
Plan documents matter enormously, but they do not always have the final word. Ontario courts have consistently held that termination-related clauses in employment contracts and plan documents must comply with the Employment Standards Act, 2000 and cannot strip employees of entitlements they would otherwise have at common law — unless the language is unambiguous and lawful.
If a plan document contains a clause that purports to cancel all unvested RSUs and dividends on termination, that clause may still be unenforceable if it violates minimum standards or if the overall contract is found to be void. Getting your employment contract reviewed before you sign — or before you accept a severance offer — is one of the most effective ways to protect yourself. Our team offers employment contract review services to help employees understand exactly what they are agreeing to.
What happens if your employer refuses to pay out your LTIP on termination?
If your employer terminates you and refuses to include RSU vesting, dividends, bonuses, or other LTIP components in your severance package, you may have a wrongful dismissal claim. The key steps are to gather all plan documents, your employment agreement, any communications about your equity awards, and records of the amounts you believe are owed.
Time limits apply. In Ontario, most wrongful dismissal claims must be started within two years of the termination date. Acting quickly preserves your options.
Practical takeaways for terminated employees with equity compensation
- Document everything before you leave. Collect your LTIP plan documents, RSU grant agreements, vesting schedules, and any dividend statements before your access to company systems is cut off.
- Do not assume dividends are automatically excluded. As this case confirms, dividends that flow from an RSU grant may be recoverable even if they were not separately itemized in the original judgment.
- Read termination clauses carefully. A clause that says RSUs are cancelled on termination may not be enforceable if it conflicts with your common law entitlements or the Employment Standards Act.
- Get legal advice before signing a release. Signing a release in exchange for a severance package extinguishes your right to sue — including for unpaid LTIP amounts. Once signed, it is very difficult to undo.
- Act within the limitation period. Ontario’s two-year limitation period for civil claims applies to wrongful dismissal. Missing the deadline can bar your claim entirely.
If you are in the Hamilton or Burlington area and have questions about your LTIP entitlements after termination, our Burlington employment law team is available to review your situation.
UL Lawyers Professional Corporation offers a free initial consultation from our Burlington office and assists employees across Ontario with wrongful dismissal, severance negotiation, and employment contract disputes. If you believe your LTIP or RSU entitlements were not properly paid out on termination, speak with one of our Ontario employment law lawyers to understand your options.
This article is automated commentary on a public court decision and is for general information only — not legal advice. Decisions rely on facts unique to each case. If you are affected by a similar issue, contact a lawyer for advice specific to your situation.
FAQ
Frequently asked questions
Not automatically. Dividends on RSUs are recoverable when the evidence clearly establishes the entitlement and the dividend payment flows naturally from the RSU grant that is already part of the damages award. Plan documents and the specific facts of each case will affect the outcome.
Plan documents that purport to cancel unvested RSUs on termination may be unenforceable if they conflict with Ontario's Employment Standards Act or strip away common law entitlements without clear and lawful language. A lawyer can review your specific plan to assess whether a cancellation clause would hold up.
Supplemental reasons allow a judge to clarify or complete a judgment on matters already before the court — they do not reopen the case or allow new arguments. In this case, the court used supplemental reasons to include dividend amounts that were documented in the employee's trial evidence but not explicitly addressed in the original judgment.