Human rights legislation and releases

Question: An employee whose employment was terminated brought an action against our company for wrongful dismissal. The claim was settled and as part of the settlement the employee signed a full and final release in favour of the company. The release included any and all claims related to the employee’s employment or the termination of that employment, including any claims brought under human rights legislation. The employee has now made a complaint against the company under the Ontario Human Rights Code. Will the Human Rights Commission still consider the complaint notwithstanding the release which the employee signed?

Answer: Under the Ontario Human Rights Code, the commission has the discretion to decide not to deal with a complaint which has been made in bad faith. The issue which the courts have had to consider is whether the circumstances of an employee signing a release which releases any human rights claims and where that employee then commences a human rights complaint provides sufficient grounds to find the human rights complaint has been made in bad faith.

What the courts have held is the fact that a complainant has signed a release in exchange for a monetary settlement will not automatically result in a determination of bad faith. The circumstances under which the release was signed must be examined in order to determine whether or not the commission should deal with the complaint.

Therefore where the employee signed the release in the absence of duress, undue influence or coercion, the employee clearly understood the release included any human rights claims, and the employee was given the opportunity to obtain independent legal advice, the complaint will most likely be found to have been made in bad faith and the commission will decide not to deal with it.

If, on the other hand, there is evidence to suggest the employee was pressured or coerced into signing the release or otherwise taken advantage of, or that the employee misunderstood the nature of the release, the commission will probably proceed to investigate the complaint.

It is important for employers to make sure employees are not pressured into signing releases — an employee should never be required to sign a release in order to receive her minimum entitlements under employment standards legislation. Employees should be given a reasonable opportunity to obtain independent legal advice and they should understand it also releases the employer from any human rights claims.

Ultimately employers should be aware that it is uncertain as to whether the commission will proceed to investigate a complaint in the face of an executed release, and should bear this in mind when settling wrongful dismissal claims.

Peter Israel is the head of Goodman and Carr LLP’s Human Resource Management Group. He can be reached at (416) 595-2323 or pisrael@goodmancarr.com.

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