Kamal Parma v. Stoney Creek Lifecare, 2010 HRTO 501

HUMAN RIGHTS TRIBUNAL OF ONTARIO

B E T W E E N:

Kamal Parma

Applicant

-and-

Stoney Creek Lifecare, Extendicare (Canada) Inc., Stephanie Zajczenko-Opdam and Laura Sampel

Respondents

DECISION

Adjudicator: Faisal Bhabha Date: March 5, 2010 Citation: 2010 HRTO 501 Indexed as: Parma v. Stoney Creek Lifecare

APPEARANCES

Kamal Parma, Applicant ) Mindy Noble, Counsel

Ernst & Young Inc. in its capacity as ) Bankruptcy Trustee of the consolidated ) Estates in bankruptcy of the Royal Crest ) Sven Poysa, Counsel Lifecare Group, Inc., Extendicare (Canada) ) Inc., Stephanie Zajczenko-Opdam and ) Laura Sampel, Respondents )

BACKGROUND

1This is an Application filed March 25, 2009, under section 34 of the Human Rights Code, R.S.O. 1990, c. H.19, as amended (the "Code"). The Application alleges discrimination in employment on the basis of race, colour, ancestry, place of origin and ethnic origin.

2The respondents are represented by Ernst & Young Inc. acting as the court-appointed interim receiver and trustee in bankruptcy of the consolidated estates in bankruptcy of the Royal Crest Lifecare Group Inc. (which includes Stoney Creek Lifecare) (the "trustee"). The trustee filed a partial Response on June 17, 2009, on behalf of the respondents, seeking early dismissal of the Application on the basis that the applicant has signed a full and final release in respect of the subject matter of the Application.

3In an Interim Decision dated August 4, 2009, 2009 HRTO 1197, I ordered that a teleconference be scheduled to hear submissions from the parties on the issue of whether the Tribunal should grant the respondents' request for early dismissal of the Application on the basis of the signed release.

4A hearing by way of teleconference was held on February 25, 2010. The trustee emphasized that its participation in the teleconference was without prejudice to its position that the Application is subject to a broad judicial stay of proceedings and that it cannot proceed against any of the respondents without the written consent of the trustee or leave of the Court, as was decided by the Tribunal in a different matter involving the same corporate respondent and trustee. See Lachance v. Royal Crest Lifecare Group, 2009 HRTO 544.

5The applicant's bargaining agent, CUPE Local 1712 (the "union"), is named as an affected party in these proceedings. As such, it was given notice of the preliminary teleconference hearing, but did not appear.

THE FACTS

6There was little dispute between the parties about the key facts giving rise to this Application. The applicant began working with the respondent in 2001. The respondent operates a facility that has both a long-term care and retirement wing. The applicant generally was scheduled for 12.5 hours of work per week — though she alleges that she often worked more — earning $18.00 an hour. Initially, her position was Restorative Aide on the long-term care side, but as the result of a series of disciplinary actions, she was demoted to the position of Dietary Aide in the kitchen of the retirement home. On November 14, 2008, the applicant went off work on an extended sick leave.

7The applicant self-identifies as a visible minority Canadian, born in Guyana of East Indian background. In her Application, she alleges that the respondent refused her opportunities for advancement in employment by preventing her from competing for promotions, and by punishing her with discipline and ultimately a demotion after she complained about discriminatory management practices.

8With the assistance of the union, the applicant filed three grievances in respect of the disciplinary action and the demotion seeking removal of the incidents from her disciplinary record and reinstatement to the Restorative Aide position. On April 8, 2009, a mediation session was convened at which the applicant was represented by her union and the process was overseen by a mediator, Don Sheppard.

9There is some dispute about what happened at the mediation. The applicant alleges that she felt rushed by the mediator and by her union, that the union did not effectively advocate for her interests, that the mediator disparaged her chances of success and that she was pressured into signing an agreement with which she did not agree. The respondent characterizes the mediation as ordinary and fair, noting that it was overseen by an experienced and impartial mediator and that the applicant was afforded plenty of opportunity to reflect and consider the terms and to avail herself of the advice available from her union representatives who accompanied her.

10The parties agree that at the conclusion of the mediation an agreement was signed. The terms of settlement provided that, in exchange for the applicant agreeing to resign her employment and sign a release, the respondents agreed to pay her $5,000.00 representing approximately 2.5 weeks pay in lieu of notice for each year of service based on nine years of service. The respondents took the position that the applicant's entitlement under the Employment Standards Act, 2000, S.O. 2000, c. 41, as amended ("ESA"), would have been based on seven years' service due to an interruption in service caused by the bankruptcy, after which she signed an engagement letter with the trustee. Based on seven years' service, the settlement payment represents close to three weeks' pay in lieu of notice per year of service. The applicant was given the option of taking a cash payment, minus statutory deductions, or to direct the funds into a Registered Retirement Savings Plan (RRSP). The terms of settlement specifically provide that the applicant undertook to withdraw her human rights complaint within 48 hours.

11The applicant argues that as soon as she left the mediation, she became anxious and confused, realizing that she did not feel good about the agreement she had just signed. She believed the union failed to adequately represent her and alleges that the mediation itself was a further incidence of discrimination. She claims suicidal thoughts entered her mind, and immediately upon reaching home she made an appointment to see her physician the next day, who confirmed in a note that the applicant may have made an "error in judgment" as a result of "stress, financial and otherwise".

12The applicant states that a number of personal stress factors were affecting her at the time of the mediation. In an affidavit filed prior to the teleconference, she testifies to the following facts, among other. It must be noted that the applicant's affidavit evidence has not been subject to cross-examination:

• She was suffering tremendous and intertwined emotional and financial pressure as a result of being in an abusive relationship and having no independent income;
• Her home mortgage came up for renewal at the end of January 2009;
• She could no longer afford auto insurance and as a result is dependent on her abusive husband and children for transportation;
• On February 3, 2009, her son totalled his vehicle in an accident;
• On February 6, 2009, her father passed away, and shortly thereafter her mother was hospitalized;
• On March 8, 2009, a close cousin died tragically in a hospital accident.

13Following the mediation, the applicant did not cash the cheque, believing that she could somehow unilaterally repudiate the agreement. On June 5, 2009, the applicant filed a complaint with the Labour Relations Board alleging unfair representation by her union. The applicant did not seek to amend her Application to include the union as a respondent in these proceedings.

POSITION OF THE PARTIES

14The respondents' position is that the applicant voluntarily entered into a full and final settlement of any and all claims arising from the termination of her employment, which explicitly referenced the Code and included an undertaking to withdraw this Application.

15Relying on Pritchard v. Ontario (Human Rights Comm.), 1999 CanLii 15058 (Ont. Sup. Ct.), respondents' counsel argued that none of the accepted factors for consideration when determining whether to override a release were present in this case. Counsel argued that the applicant clearly understood the significance of the release; while she may have changed her mind and came to regret her decision, there is no indication that she did not understand what she signed at the time. Counsel also pointed to the fact that the applicant had union representation and that the release was signed as part of a negotiation involving an experienced mediator.

16Further, counsel argued that the terms of the minutes of settlement provided the applicant with compensation well in excess of her ESA entitlements had she been terminated without cause, even though this was a voluntary resignation by the applicant. Payment of $5,000 represented approximately two and half weeks per year of service.

17Counsel further argued that there is no evidence of economic duress. Relying on the fact that the applicant chose not to cash the cheque until January 2010, and has failed to allege financial pressures of the degree normally required to establish economic hardship, the respondents argue this factor is not met.

18Finally, the respondents argued that the applicant failed to establish psychological or emotional duress. Again, while she cites personal events in her life, the respondents argued that the test laid out in cases such as Dunn v. Sault Ste. Marie (City), 2008 HRTO 149, and Kailani v. Securitas Canada, 2009 HRTO 1183 is not met on the facts of this case.

19The applicant took the position that she did not fully understand the impact of signing the release by virtue of the fact that she was, at the time, on an extended medical leave of absence from work due to depression, which she alleges was triggered by incidents of workplace discrimination that form the basis of this Application. As a result, counsel stressed the importance of understanding the applicant's state of mind at the time that she signed the release in the context of the history of her allegations of discrimination. She further alleges that the union failed to provide her with effective representation, which is detailed in her duty of fair representation complaint she has commenced at the Ontario Labour Relations Board.

20Further, counsel submitted that while the applicant received compensation for the termination of her employment, the terms of settlement did not compensate her for alleged Code breaches. Evidence of duress included very stressful personal factors, such as alleged spousal abuse, financial hardship, the death of her father and the involvement of her son in a car accident. Counsel urged me to adopt the approach used in Bielman v. Casino Niagara, 2009 HRTO 123, where the Tribunal decided to hear the case on the merits notwithstanding the existence of a release, and to decide what import the release should hold, if any, upon the conclusion of the hearing on the merits.

ANALYSIS AND DECISION

21It is important to stress that this case is not yet being decided on the merits. I have not considered evidence as to the allegations of discrimination made by the applicant. The question at this preliminary stage is simply whether it would be an abuse of the Tribunal's process, considering all the circumstances, to allow the Application to proceed to a hearing, and to require the respondents to defend against the allegations of discrimination.

22First, it is necessary to consider whether the release at issue encompassed claims under the Code. The release expressly references the Code and contains a lengthy paragraph that provides for an express "full and final settlement of any existing, planned, or possible complaint, grievance, claim, application, action or cause of action that the Releasor might otherwise have under or respecting the Human Rights Code…". It goes on to provide that:

…the Releasor agrees that the Settlement is and shall be treated as a settlement for purposes of section 45.9 of the Human Rights Code in the event of such a filing, and that she, or any entity or representative acting on her behalf, is estopped from asserting, initiating or maintaining such a complaint… including but not restricted to in the courts, the Human Rights Tribunal of Ontario, or any other tribunal, and that to do so shall constitute an abuse of process.

23I have no difficulty finding that this release clearly encompassed existing or prospective claims brought under the Code. However, accepting that the release expressly contemplated legal action related to human rights does not end the enquiry. In Bielman, the Tribunal stated:

The Code does not explicitly bar applications such as this where a release has been signed by the applicant. In each case where a respondent requests early dismissal of an application, the Tribunal must decide whether, in the circumstances, it would constitute an abuse of the Tribunal's process to allow the application to proceed to a hearing on the merits. An important consideration in that analysis is the respondent's reasonable expectation that a release of this kind will bring finality to any employment related dispute they may have with a former employee.

24Thus, while the existence of a full and final release is not a bar, there are many reasons to uphold agreements reached between freely contracting parties. Failure to uphold such agreements, and to hold parties to their commitments, can undermine the integrity of negotiated settlements and hinder the timely and informal resolution of disputes.

25Both parties referred to the Pritchard factors in their submissions. These factors look to (1) whether the applicant fully understood the significance of the release; (2) whether she received sufficient and fair consideration for signing the release; (3) evidence of economic pressure; and (4) evidence of psychological or emotional pressure amounting to duress.

26I do not find that any of the Pritchard factors have been established in this case.

27I have no doubt the applicant faced a difficult choice at a difficult time in her life. She made a tough choice, which she very quickly came to regret. She apparently believed that by not depositing the cheque she could somehow rescind the agreement. That was an erroneous belief, but does not amount to a misunderstanding of the sort required to override a legally binding agreement.

28While there was some dispute as to what the quantum of settlement represented in terms of the ESA notice period, there was no disagreement that she received at least her statutory entitlement for a "without cause" termination. It is not necessary for minutes of settlement to correlate specific consideration to enumerated allegations or statutory rights in order to be found to be comprehensive, fair, final and binding. This factor simply requires me to examine the terms and to determine whether, on the whole, fair and sufficient consideration was provided. In applying this factor, it is helpful to be guided by the common law doctrine of unconscionability, which allows a contract to be set aside where the consideration is patently inadequate or the effects are oppressive to one party. I do not find that the terms of settlement in this case are unconscionable, meaning that they are not so insufficient or unfair as to warrant setting the release aside.

29While the applicant alleges she faced financial pressure, no evidence was adduced to support a claim of significant financial hardship. Even if I were to accept that the applicant experienced some degree of insecurity, the case law is clear that economic pressure alone is not sufficient to set aside a release: Sinnett v. Orlick Industries, 2009 HRTO 916, at para. 24.

30Similarly, she may have been under considerable emotional pressure, but this does not meet the standard of "duress". Anyone making a decision to resign from their employment is going to face considerable pressure and conflicted emotions. In Kailani, supra, at para. 30, the Tribunal applied the dictionary definition of duress:

The test for whether a person has signed a settlement under duress is high. Black's Law Dictionary (6th ed.) offers the following definition of duress:

Any unlawful threat or coercion used by a person to induce another to act (or to refrain from acting) in a manner he or she otherwise would not (or would). Subjecting person to improper pressure which overcomes his will and coerces him to comply with demand to which he would not yield if acting as free agent.

31There is no indication that the circumstances surrounding the applicant's signing of the release amounted in any way to "coercion". Although she did not have independent counsel, and has made allegations of unfair representation against her union, the test for duress requires evidence of an "unlawful threat or coercion" to induce an action that would not otherwise have been taken. To the extent that the applicant alleges her union contributed to additional Code breaches by "colluding" with the employer, she did not seek to amend the Application to add any additional respondents or to include additional allegations. Therefore, any allegation of discrimination against the union is not encompassed in this case.

32Looking at the circumstances on the whole, there are no factors that would lead the Tribunal to set aside the terms of the settlement. While the applicant may not have felt good about the settlement afterwards, this is not sufficient to unravel a fully and fairly concluded deal between the parties, which expressly resolved all matters between them, including her claims under the Code.

33The Application is accordingly dismissed.