04/03/2013 04:52 EDT | Updated 06/03/2013 05:12 EDT

EHealth agrees to settle lawsuit and pay employees $6.7 million in bonuses

TORONTO - EHealth Ontario will pay $6.7 million in bonuses to hundreds of workers after agreeing to settle a lawsuit filed by the employees.

The eHealth workers launched a class-action suit last summer to recover bonuses of about 7.8 per cent they had been promised in 2011, but were denied by the Liberal government.

Lawyers advised the provincial agency it would likely cost more to fight the lawsuit because the workers all had written letters promising them bonus payments.

The Superior Court of Justice accepted the settlement of the eHealth class action last week.

Health Minister Deb Matthews had told the eHealth board to review the bonuses in light of the government's attempts to freeze public sector wages for two years to fight an $11.9 billion deficit.

Greg Reed, the CEO of eHealth, was forced to return an $81,250 performance bonus last August after the employees launched their lawsuit to get their promised bonuses.

Reed was brought in by the Liberals in 2010 when they cleaned house at eHealth, after the auditor general found there was little to show for the $1 billion that had been spent to that point to develop electronic health records.