AHRT decision shows risks of informal settlements, says employment lawyer offering tips for HR
A recent Alberta Human Rights Tribunal decision, Desta v. Schnitzer Steel Canada Ltd., 2025 AHRC 51, provides a valuable case study for employers navigating the often delicate process of human rights dispute resolution.
The case saw the employer and former employee verbally agree to a settlement during a Tribunal Dispute Resolution (TDR) process. However, the complainant later refused to sign the release documents, raising new unrelated concerns.
As Andrew Zabrovsky, partner at Hicks Morley in Toronto, explains, verbal agreements, though common in these contexts, often lead to disputes when the terms are not documented and understood clearly at the time they are made.
“In many cases, like this one, what happens is the employee is agreeing to a general release of liability, and they don't really know what that looks like, and when they see it, they don't like it,” he says.
“And that is common, for complainants not to like what the release actually looks like.”
Employee mediations: planning ahead and managing expectations for
Employers often miss a key opportunity for clarity by not preparing a draft release before mediation begins, and this omission often leads to confusion and disagreement after a verbal settlement is reached.
In this case, the tribunal upheld the agreement, but Zabrovsky points out that not all decisions like this are as straightforward.
“They want to resolve complaints, so they do have the discretion to conclude that a settlement has been reached,” he says.
“They want to close as many files as they can. It's not always as easy as this one.”
Joel Fairbrother, partner at Bow River Law in Calgary, adds that while these verbal agreements may be valid in principle, they can be difficult to enforce.
“Generally, an oral contract is supposed to be as good as a written one, but the difficulty with an oral contract is that they're hard to prove,” he says.
“That's why we put everything in writing.”
He echoes the importance of advance preparation as a crucial step that can often be missed; it’s best practice to present the full scope of the settlement upfront: “Have a copy of what you know you want them to sign, bring it with you to the tribunal or dispute resolution conference, and then let them see it, because if they see it and agree to it, there is no way they're getting out of that.”
Written offers help to dismiss complaints
Even outside of a formal TDR process, employers can proactively attempt to resolve disputes by making written offers, which – if rejected – can potentially be used to dismiss a complaint.
“If you make an offer that the tribunal thinks is reasonable, they can actually dismiss your case,” Fairbrother explains.
“So it's very similar to if there's an agreement during mediation, the same thing can happen if the employer makes a reasonable offer just any time in writing, and the employee refuses it, the employer can then try to use that.”
This approach parallels the legal logic in Desta, where the Tribunal evaluates whether a settlement exists and whether the complainant’s post-agreement objections are valid.
“Usually, before pen’s on paper, it's not safe to assume you have an agreement,” says Fairbrother.
“But the Tribunal has been willing to step in and say, ‘There was a verbal agreement, we think that the writing … reflects that agreement, and so this is done.’ They're quite willing to do that.”
Limits of enforceability and evidentiary gaps
Even when a signed agreement exists, enforceability can depend on factors such as language proficiency or mental health, Zabrovsky warns.
“When somebody's engaged in a human rights process, and somebody signs a release, there will typically be a presumption that the documentation is something that can be relied on,” he explains.
“But there are lots of factors that can go into a court's thinking or a tribunal’s thinking … there may be language barriers, there may be mental health issues that that come into play that could result in the contract not being enforceable, or the settlement not being enforceable.”
In cases like these, it will be up to the claimant to prove that those factors should null an agreement, Zabrovsky adds. He also notes the evidentiary hurdles tribunals face in such cases.
“If we could have a full transcript of everything that happened, it would make things a lot easier. The other challenge is, at least in Ontario, the mediators, the people who are acting between the parties trying to help you get a deal, they are not compellable witnesses, so they can't be called on to testify in a hearing to say ‘Yes, there was a deal,’” he says.
“They're not allowed. Neither side is allowed to call them as a witness. Their notes have to be destroyed at the end of the mediation, so the only witnesses to the deal are the two parties, the complainant and the respondent. It makes it very challenging.”
Legal representation reduces confusion
Self-represented complainants are more likely to be unaware of legal consequences and prone to misunderstanding, Fairbrother explains.
“This is a common issue with self-represented complainants,” he says.
“Not having legal advice, they may agree to something they haven't fully considered, and they may also think that they can back out of something that they cannot.”
Zabrovsky adds that representation on both sides improves clarity and follow-through.
“In the human rights context, I would usually tell them to go contact the Law Society, who can recommend a lawyer, or contact the Human Rights Legal Support Center in Ontario, which helps human rights applicants,” he says.
“Because I think it is incredibly helpful to have representation on the other side, to avoid things just like this. If there's a lawyer on the other side, I'm dealing with somebody who is covered by the same rules as I am, and who I trust. If we've got a deal, they will be able to get their client to uphold their end of the deal.”
Human rights tribunal mediations: problem-solving mindset
Adversarial tactics tend to backfire in human rights mediation; as Fairbrother points out, even if there is no liability found, employers are still advised to acknowledge the complainant’s experience and try to offer some sort of recompense.
“A lot of the time, the mistake employers will make is assuming that the human rights complaint is bogus,” he says, “when usually there's something there. Even if it's not a valid or a successful human rights complaint, usually there is a wrong there somewhere, and acknowledging that without admitting liability, I think is the correct approach for an employer.”
In Fairbrother’s own practice, he has seen employers agree to take courses on mental disorders, for example, which has been effective in mitigating negative outcomes and reputational damage as well.
“If you actually want to settle, being condescending to a complainant employee is a big mistake,” he says.
“Trying to figure out what the what the complainant actually wants can be helpful. Sometimes, if you can have things other than money that you're willing to do, that plays very well with complainant employees.”
Employee mediation recommendations for HR leaders
The Desta decision reinforces the importance of planning, clarity, and documentation in human rights mediations; Fairbrother recommends that employers provide clear language, preview settlement terms in advance, and avoid adversarial tactics. “If they see it and agree to it, there is no way they're getting out of that.”
Zabrovsky underscores the same idea, stressing that HR should focus on straightforward dealing in negotiations.
“Internally, you want to have planned for your best case and worst case scenarios, going into mediation. What are your objectives? What do you want? What range of settlement would you be looking for?” he says.
“If the other side doesn't sign, you need something to help you prove that you had a settlement. Because if you don't have a settlement, then you still have an active human rights claim that you have to defend.”
