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Enforceability of releases

What happens when an employee who signed a release subsequently tries to pursue a claim?
employment law
Employers usually make efforts to get a full and final release from employees when there is any threat of a claim. Shutterstock

By Stuart Rudner

Employers usually make efforts to get a full and final release from employees when there is any threat of a claim. The goal is to provide them with comfort that no future claim will be forthcoming.

But what happens when an employee who signed a release subsequently tries to pursue a claim? If they signed a release, are there circumstances under which they can do so?

Over the years, employees have discovered a few loopholes and exceptions that allow them to file claims or complaints against a former employer despite having executed a full and final release.

In Wieler v Saskatoon Convalescent Home, the Saskatchewan Court of Appeal dismissed the case of an employee who filed a complaint pursuant to occupational health and safety legislation after she was terminated.

Background

In August 2012, the woman began working full-time at a long-term care home as the assistant director of care. Initially, she was placed on probation for six months. Five months later, she was let go because her employer deemed she wasn’t “suitable” for the position. She was asked to sign a release in exchange for one month’s severance pay.

The woman consulted a lawyer who advised her that she didn’t have a viable claim against her employer, and so she signed the release. However, less than a month later, she filed a complaint with the health and safety division of Saskatchewan’s Ministry of Labour, claiming that she had raised safety issues with management that were never addressed about bullying and unsafe staffing levels before she was let go.

The employee’s complaint to the ministry was dismissed because she had signed a release, which stipulated that she wouldn’t bring any claims forward against her employer. She appealed the decision to Saskatchewan’s Labour Relations Board, arguing issues of workplace safety can’t be waived. But the board also dismissed her appeal. The woman appealed the decision again to the Saskatchewan Court of Appeal.

Personal versus systemic

At issue for the Saskatchewan Court of Appeal was whether the woman’s complaint was personal to her — and thus covered by the release she signed after she was terminated — or whether it concerned a systemic workplace issue. If the latter, then the complaint should be allowed to proceed despite the executed release. However, the appeal court determined that her complaint wasn’t about systemic issues in the workplace, but rather personal to the complaint. It concluded that when the employee signed the release and received a month’s severance pay, she had effectively settled her claim.

The takeaway

Employees should understand that a release is not a formality, it is an agreement not to pursue any claim or complaint against the employer. For that reason, it should not be signed if any consideration exists for pursuing a legal action.

Employers that want the security that a release provides should ensure that the employee is provided with valid consideration (meaning something of value) in exchange for the release, as well as a reasonable period of time to consider the release and obtain independent legal advice if they choose. Even if all of those criteria are met, there may be circumstances in which the release will not be 100 per cent effective.

© Copyright Canadian HR Reporter, HAB Press. All rights reserved.

Stuart Rudner

Stuart Rudner, Employment Lawyer and MediatorStuart Rudner is the founder of Rudner Law (RudnerLaw.ca), a firm specializing in Employment Law and Mediation. He can be reached at stuart@rudnerlaw.ca, (416) 864-8500 or (905) 209-6999, and you can follow on Twitter @RudnerLaw.
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