The importance of attention to both the language in a Release and the context of its signing has been highlighted in a recent Federal Court decision.
The Canadian Human Right Commission (CHRC) declined to deal with a human rights complaint in the face of a signed Release. The complainant applied for judicial review.
The applicant was an employee of Bell Canada and after 16 years of employment went on disability leave due to mental health issues. She was on disability leave for approximately three years. She was planning a gradual return to work in 2009, when she was called to a meeting with her employer. She was told that her position had already been eliminated (in 2008) as part of a large scale reorganisation/downsizing that affected hundreds of employees. Bell offered her a severance package.
She retained counsel to assess her options and to negotiate an improved severance package. At several points during the negotiations, she asserted that because she was terminated while on long term disability, Bell should provide some accommodation to her and that its conduct in eliminating her position and terminating her employment was discriminatory and a violation of her human rights. She indicated that she could and would pursue a complaint to the CHRC if the settlement was not satisfactory.
An agreement was signed by the applicant with the following “Acknowledgment, Release and Discharge”:
In consideration of the terms and benefits of the said severance package, I hereby grant to Bell Canada…a full and final release and discharge with respect to any right, action, claim, cause of action or complaint, damage, or debt that I have, had or may claim against [Bell]…
The applicant provided her counsel with two versions of this Release: an original version which was witnessed and another version which contained her handwritten ‘addendum’:
I, [applicant], have signed above to honour this legal contract. However, in no way do I agree with termination while I was on LTD prior to return to work date of May 4, 2009. I believe that Bell Canada allegedly acted unethically, under false pretenses, denied my human rights and discriminated against my disability.
The applicant stated that her lawyer had recommended that two versions be prepared with the intention that she would attempt to have the addendum version used. Her lawyer suggested that if Bell refused the addendum version, the original version without the addendum would be provided. It appears that Bell never received the addendum version and was not aware of its existence until after the applicant filed her complaint with the CHRC.
Bell paid out the agreed-upon amounts to the applicant.
The applicant filed a human rights complaint alleging discrimination on the basis of her mental health disability after signing the settlement. In her complaint, she stated the following about the settlement and The Release:
I was forced to sign-off the Termination Package under mental duress. I instructed my lawyer to do what she thought was best because I was incapable of deciding anything. I also instructed her to send Bell my sign-off that included an Addendum ‘A’ advising that I did so under mental duress.
The CHRC decision declined to deal with the complaint based on paragraph 41(1)(d) of the Canadian Human Rights Act, which permits it to not deal with a complaint if it appears to be trivial, frivolous, vexatious or made in bad faith. In coming to its decision, it relied on the following factors:
- • She was represented by a lawyer;
- • the lawyer negotiated the settlement;
- • the complainant signed a release relieved the respondent of any liability relating to her termination;
- • the complainant’s signature on the release was witnessed and sent to the respondent by her lawyer;
- • the only version of the release with the addendum was the complainant’s own copy;
- • Bell had received the original signed and witnessed version without the addendum; and
- • reasonable consideration (the severance payment) was received by the complainant in exchange for the promise not to pursue a complaint.
The investigator concluded that the complaint was not trivial, frivolous or vexatious. However, he concluded that the complaint was made in bad faith.
The CHRC’s policy on final releases states:
Section 41(1)(d) of the Canadian Human Rights Act allows the Canadian Human Rights Commission to exercise its discretion not to deal with a complaint where the issues raised in the complaint have been dealt with through another process. This includes complaints which have been settled and where releases have been signed.
The Commission may choose to deal with complaints despite the fact that the parties have signed a final release if it appears that the human rights issues raised in the complaint have not been addressed in the settlement.
In its determination of the impact of a final release on a complaint the Commission will consider several factors including the following:
1. Did the parties contemplate the human rights claim at the time the release was signed?
2. Was the complainant represented or did the complainant have a reasonable opportunity to seek independent advice? If not, is there evidence that the complainant understood the effect of the release?
3. Was reasonable consideration received in exchange for the complainant’s promise not to proceed with the human rights claim?
4. Was the complainant free of duress?
In Lusina v. Bell Canada, 2005 FC 134 (CanLII),
at para. 35, the Court adopted the following definition of “bad faith”:
…the term “bad faith” was described as one that normally “connotes moral blameworthiness on the part of the person accused, encompassing conduct designed to mislead or pursued for an improper purpose”.
The court noted that the applicant’s allegation that she signed under mental and/or economic duress was merely acknowledged by the investigator but was not assessed in the determination of bad faith.
The CHRC incorporated into its policy a guide prepared by the Ontario Human Rights Commission. That guide elaborates on four factors used to determine if a release reflects a settlement of a human rights complaint, as established in Pritchard v. Ontario Human Rights Commission 1999 CanLII 15058 (ON SC):
1. Did the complainant understand the significance of the release? This will usually turn on whether or not they were given sufficient time, and a sufficient opportunity to obtain advice.
2. Did the complainant receive compensation for the alleged breach of the human rights issue? If for example, the complainant only received an amount akin to what they would have been entitled to under statute…then it may be implied that they did not also receive compensation for the human rights violation.
3. Was the complainant subject to such significant economic pressure that his or her consent was negated due to duress?
4. Was the complainant subject to such significant psychological or emotional pressure that his or her consent was negated due to duress?
The Ontario guide also provides the following guidance:
- • special consideration should be given to complainants who are experiencing a mental disability (e.g., depression or bi-polar disorder), that may impair their ability to understand the significance of the release.
- • where an employer has a reasonable basis to believe that an employee is experiencing a mental disability that could impair his or her judgment, the employer should request that the employee obtain medical clearance before signing the release.
The court concluded:
The Commission’s finding that the complaint “may be in bad faith” – in other words, that [the applicant's] conduct was morally blameworthy – did not take into account her particular circumstances, including the need to consider the issue of mental duress as that concept is understood in the human rights context. The Commission ignored or misapprehended the evidence of the applicant’s mental health and her assertions that she signed the release under mental duress.
The court was quick to note that it was not determining whether the applicant was under some form of duress: “rather, the point is that the Commission’s failure to address the issue and to consider her circumstances as a person suffering from a mental illness renders the decision unreasonable”. In particular, the reasons of the CHRC did not address:
- • the mental or emotional duress that the applicant alleged, or
- • the fact that the mental health issues of the applicant pre-dated the negotiations and were known to the employer and to the CHRC.
The complaint was sent back to the CHRC to be re-determined.