About a dozen members of the Fort McKay First Nation in northern Alberta held a demonstration outside the band offices Wednesday and accused the band of wasting money.
They allege a worker with a band agency was given a payment of $250,000 after receiving nine months notice she would lose her job.
The protesters carried signs saying "We Want Answers" and "We Demand an Investigation."
Band member Madeline Delisle said the money should have been spent on services for the community.
"We could have had social programs here for our people that can't get jobs due to addiction problems. There could have been more social programs put into this place for our people," she said. "And then give bonuses like that to outside people who I don't even know?"
The woman who is alleged to have received the payment, Lisa Schaldemose, is the executive director of the Fort McKay Industry Relations Corporation.
She issued a written statement Wednesday afternoon declining a request for an interview and referred future media requests to the Fort McKay First Nation.
"Chief Jim Boucher has provided comments on these matters already," she wrote.
Boucher would not confirm if the money was paid and declined to comment further, citing privacy legislation.
He called it "subject matter that might be going through the courts. We have no comment on that. It's a Privacy Act matter. It's an employee's right to have their information safely kept by their employer, which happens to be chief and council."
Boucher called Wednesday's protest an organized campaign by two councillors who want to "destabilize" the organization and are trying to get some employees fired.
He said he has no plans to meet with the protesters Wednesday night.
Fort McKay is 60 kilometers north of Fort McMurray and is on the edge of northern Alberta's oilsands developments.