Employer can’t take advantage of employee’s ignorance

Lambert v. Digital Rez Software Corp. (2002), 17 C.C.E.L. (3d) 131 (B.C.S.C.)

The plaintiff was told she was being laid off after working for the defendant for three-and-a-half years as a marketing director. The employee asked to be terminated instead because she wanted to receive severance pay. The employer agreed to termination and told her she was entitled to three-and-a-half weeks of severance pay in lieu of notice.

The plaintiff neither responded nor made objection to the offer, and she cashed the cheque for this amount of severance. Six months later the plaintiff initiated an action for wrongful dismissal.

The court held there was no agreement between the parties for the employee’s acceptance of three-and-a-half weeks of severance pay in full satisfaction of her legal rights. In the alternative, the court found that if there was an agreement, it was unconscionable.

With respect to the issue of whether or not an enforceable agreement existed between the parties, the court stated there had been no acceptance of the employer’s offer of severance. As such, there could be no agreement.

Furthermore, even if an agreement did exist it was unconscionable due to the inequality of bargaining power between the parties, the employer’s unconscientious use of its position of power, and an agreement which was substantially unfair to the employee.

The court found the plaintiff was unaware of her rights and the severance was considerably less than the three months she was entitled to at common law. The plaintiff was awarded three months’ salary in lieu of notice.

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