HUMAN RIGHTS TRIBUNAL OF ONTARIO
B E T W E E N:
Floyd Wedderburn Applicant
-and-
Air Liquide Canada Inc. Respondent
-and-
United Steelworkers of America, Local 9042 Intervenor
DECISION
Adjudicator: Sheri D. Price Date: March 30, 2010 Citation: 2010 HRTO 691 Indexed as: Wedderburn v. Air Liquide Canada
Appearances
Floyd Wedderburn, Applicant ) on his own behalf Air Liquide Canada Inc, Respondent ) Bruce Pollock, Counsel USWA Local 9042, Intervenor ) Mark Rowlinson, Counsel
1This Application, filed under section 34 of the Human Rights Code, R.S.O. 1990, c. H.19, as amended, (the "Code"), alleges that the respondent discriminated against the applicant on the basis of disability in respect of employment. The respondent made a Request for Early Dismissal of the Application on the basis that the applicant signed a full and final release with respect to the subject-matter of the Application. I heard this Request by conference call on March 12, 2010, pursuant to an earlier Interim Decision in this matter: 2009 HRTO 2064.
BACKGROUND
2The applicant began work with the respondent in October 2007. He went off work in September 2008 as a result of injuries sustained in a car accident. The applicant received short term disability benefits until December 2008, at which time the benefits were discontinued. On or about April 6, 2009, the applicant submitted a medical note from his doctor indicating that he was fit to return to work, with some restrictions. After doing so, the applicant was called in for a meeting on April 9, 2009 with his trade union representatives and the respondent employer.
3The applicant submits that he was told during the April 9, 2009 meeting that the company was going to lay off the three most junior employees at the end of the month. The message conveyed was that the applicant would be one of those laid off because he was the second most junior person on the seniority list.
4The applicant submits that the respondent gave him two options at the April 9, 2009 meeting. First, he could voluntarily agree to a permanent layoff at that time with no right of recall, and receive a specific lump sum payment from the company, as well as short term disability benefits for the period from December 2008, when they had been cut off, to April 10, 2009, at which point, according to his doctor's note, the applicant was no longer disabled from working. Second, the applicant could return to work in accordance with his doctor's note and face layoff with recall rights at the end of the month, without the short-term disability benefits or the other lump-sum payment.
5The applicant submits that he was in dire financial straits at the time of the April 9, 2009 meeting. By that point, he had been without income since December 2008. Also, the short-term disability benefits he had been receiving since September 2008 were less than his regular wage. He submits that he had many unpaid bills, including his payments on his car and his car insurance. He was significantly behind in his child support payments. He was facing suspension of his driver's license as a result. He was also significantly behind in his rent and facing eviction proceedings as a result. He submits that he was depressed and under a lot of stress at the time. He submits that he did not even have enough money for proper food. For these reasons, the applicant chose to accept the permanent layoff option and to receive the monies owing to him in accordance with that choice.
6A written agreement entitled "Final Agreement" was signed by the applicant, his trade union and the respondent employer during the meeting on April 9, 2009.
7Pursuant to the written terms of the "Final Agreement", the applicant agreed, among other things, that he would be permanently laid off from his employment with the respondent, without any right of recall and he would receive the monies noted above.
8The agreement also contains the following terms:
The Employee or/and the Union withdraws complaint, claim, grievance, action or any proceedings regarding his employment with the Employer ...
In consideration of the above, the Employee renounces to file any complaint, claim, grievance, action or any proceedings against the Union and/or the Employer.
The parties recognize that they had the opportunity to obtain advice, that the terms and conditions of the present Agreement are reasonable and sufficient and they confirm that the Agreement was concluded freely after careful consideration.
Positions of the Parties
9The applicant submits that he entered into the April 9, 2009 agreement under false pretenses. He submits, and the respondent agrees, that ultimately no one was laid off at the end of April 2009, not even the one employee who was junior to the applicant. The applicant submits that he should not be held to an agreement that he entered into on the basis of the respondent's misrepresentation.
10The respondent submits that the applicant had a choice to make and he made it freely. This is reflected in the written document. The respondent submits that the applicant could have chosen to return to work with the employer. Instead, by mutual agreement, the applicant's employment was terminated, not by the employer, but by agreement of the applicant, his trade union and the respondent. The respondent submits that it would be unfair and an abuse of the Tribunal's processes to permit the Application to proceed.
11With respect to the alleged misrepresentation, the respondent submits that the respondent did not misrepresent the layoff situation to the applicant or his trade union at the time of the April 9, 2009 meeting. Ms. Calder, the respondent's Human Resources Manager, explained during the conference call hearing, that the respondent was in the process of relocating its Bramalea warehouse to Burlington in early to mid-2009. At the time of the April 9, 2009 meeting with the applicant, the plan was for that relocation to occur on May 1, 2009. Ms. Calder explained that at some point prior to the April 9, 2009 meeting with the applicant, the respondent had learned that three employees from the Bramalea warehouse were transferring into the location where the applicant worked, necessitating the layoff of the three most junior persons on the seniority list, one of whom would be the applicant.
12On the same day of the meeting with the applicant, the respondent met with another employee who also entered into an agreement to leave his employment with the respondent. This still meant that two employees would be laid off at the end of the month. This would have included the applicant who was the second-most junior person on the list.
13The respondent submits that it accurately described the situation to the applicant at the time of the April 9, 2009 meeting when he entered into the "Final Agreement".
14However, at some point after the April 9, 2009 meeting with the applicant, but before May 1, 2009, the respondent decided to delay the move to the Burlington warehouse to June 1, 2009. This meant a one-month delay in the transfer of the three employees into the plant and a delay also in the layoffs necessitated by that transfer.
15As it turned out, by the time June 1, 2009 came around, it was not necessary for the respondent to lay off any employees to make room for the three employees who were coming into the plant. Two employees, one of whom was the applicant, had voluntarily agreed to leave the respondent's employ on April 9, 2009. This reduced the need for two of the three planned layoffs. Then, another employee decided to retire from employment as of June 1, 2009. This meant that the respondent did not need to lay anyone off.
16The applicant conceded that he was not in a position to contradict anything Ms. Calder had said about the way things unfolded in terms of the evolving need for layoffs during the period from April 9, 2009 to June 1, 2009. Moreover, he was not in a position to contradict her assertion that she honestly communicated the situation as it was at that time of the April 9, 2009 meeting – that the applicant would likely be laid off at the end of the month.
DECISION
17Section 23(1) of the Statutory Powers Procedure Act, R.S.O. 1990, c. S.22, as amended, provides that a tribunal may make such orders or give such directions in proceedings before it as it considers proper to prevent abuse of its processes. This Tribunal has held that filing a human rights application after signing a full and final release in respect of the subject-matter of the application may constitute an abuse of the Tribunal's process and where that is the case, such applications should be dismissed: Dube v. Rockhaven Recovery, 2009 HRTO 53; Sinnett v. Orlick Industries, 2009 HRTO 916 and Kailani v. Securitas Canada, 2009 HRTO 1183.
18The applicant submits that he should not be bound by the written agreement he entered into because of economic duress and because he entered into the agreement due to the respondent's fraudulent misrepresentation that he would be laid off at the end of the month if he did not agree to a permanent layoff.
Economic Duress
19It is not uncommon for parties before the Tribunal to argue that they entered into written settlements because of financial hardship, and that such agreements ought to be set aside on the basis that they were entered into under "economic duress". However, entering into an agreement because it will help to alleviate financial difficulties, even where those difficulties are significant, does not necessarily mean that the agreement has been entered into under duress.
20Where "duress" is put forward as the basis for vitiating a settlement agreement, the party claiming distress is really stating that he or she entered the agreement against his or her own free will.
21Black's Law Dictionary, 8th ed. (St. Paul, MN: Thomson West, 1999), gives the following as one of the definitions of "duress":
Broadly, a threat of harm made to compel a person to do something against his or her will or judgment, especially a wrongful threat made by one person to compel a manifestation of seeming assent by another person to a transaction without real volition.
22"Economic duress" is also specifically defined in Black's, not in terms of a party's financial circumstances per se, but the threat of financial harm:
... an unlawful coercion to perform by threatening financial injury at a time when one cannot exercise free will.
23The Ontario Court of Appeal described the elements of economic duress in a very recent case, Taber v. Paris Boutique & Bridal Inc. (Paris Boutique), 2010 ONCA 157 at pars. 8-9:
There is no doubt that economic duress can serve to make an agreement unenforceable against a party who was compelled by the duress to enter into it. Nor is there any doubt that the party can have the agreement declared void on this basis.
However, not all pressure, economic or otherwise, can constitute duress sufficient to carry these legal consequences. It must have two elements: it must be pressure that the law regards as illegitimate; and it must be applied to such a degree as to amount to "a coercion of the will" of the party relying on the concept. See: Stott v. Merit Investment Corp., 1988 CanLII 192 (ON CA), 63 O.R. (2nd) 545 (Ont. C.A.), at para. 89. In Stott, the court held that in order for economic duress to be found, the party whom is being illegitimately pressured must be put in position where he has no "realistic alternative" but to submit.
24In this case, I am not satisfied that the applicant was compelled to enter into the agreement because of economic duress. The applicant was an employee with an undisputed right to return to work making his full salary – unless and until he was legitimately laid off in accordance with his seniority. The respondent merely offered the applicant an incentive to choose the permanent layoff option. There is no allegation that the respondent threatened him with financial injury if he did not accept the permanent layoff option.
25The applicant here had a choice: to accept permanent layoff and the payments associated with that option or to return to work and face layoff in accordance with his seniority. He freely chose the permanent layoff option because it seemed like the best choice for him at the time on the basis of the information available to him.
26There is no basis upon to conclude that the applicant did not truly consent to the agreement, which is what a finding of duress would entail. There are no facts alleged here which could lead me to conclude that the applicant had no "realistic alternative" but to submit to the agreement. Although I do not doubt that the applicant was in a dire financial situation at the time he entered into this agreement, I am not persuaded that the applicant had no free choice such that the agreement was entered into under "economic duress".
Fraudulent misrepresentation
27The applicant also argues that the "Final Agreement" should be set aside and he should be permitted to proceed with his Application because he entered into the agreement under false pretences. Specifically, he claims that he only entered into the agreement because he was led to believe that he would have been laid off less than a month later if he chose to return to work instead of the permanent layoff option. Essentially, the applicant argues that the agreement was entered into on the basis of a fraudulent misrepresentation by the respondent and ought to be set aside on that basis.
28In 1018429 Ontario Inc. v. Fea Investments Ltd., 1999 CanLII 1741 (ON CA), 179 D.L.R. (4th) 268 at para 51, the Ontario Court of Appeal considered this issue and cited as authoritative Professor Fridman's description of fraudulent misrepresentation in The Law of Contract, 3rd ed. (1994) at p. 294:
A fraudulent misrepresentation is one which is made with knowledge that it is untrue and with the intent to deceive. It may even constitute a term of the contract. Whether it does or not is immaterial, since fraud gives rise to effects in the law of contract and the law of tort. A contract resulting from a fraudulent misrepresentation may be avoided by the victim of the fraud. In such instances the apparent consent by the innocent party to the contract and its terms, is not a real consent. Whether or not the effect of such fraud is to induce a mistake (which might render the contract void), the consent of the innocent party may be revoked at his option.
29If I were to find that the respondent deliberately misled the applicant about the likelihood of his layoff and therefore the basis upon which he entered into the agreement, I might very well agree that it would not be an abuse of process for the Application to proceed. However, in this case, I cannot conclude that the agreement of the parties was based on a fraudulent misrepresentation by the respondent.
30At the time the April 9, 2009 agreement was entered into, the respondent intended to lay off at least two employees to make room for employees who were entitled to transfer into the plant from the respondent's Bramalea warehouse. (On April 9, 2009, before the meeting with the applicant, another employee had voluntarily left the respondent's employ, such that by the time of the applicant's meeting, the number of layoffs required was two, instead of three.) The applicant would have been one of the two employees to be laid off because he was second last on the seniority list. When the applicant decided to take the permanent layoff option, his departure reduced the need for one of the two intended layoffs. Then, before the transfer took place, another employee voluntarily left the respondent's employ, removing the need for the only remaining intended layoff.
31The respondent maintains that the information it communicated to the applicant at the April 9, 2009 meeting, and upon which information the applicant's decision to enter the agreement was undoubtedly based, was accurate at the time. There is nothing before me to suggest that the respondent knowingly misled the applicant to induce him into entering the agreement. The applicant could offer no evidence of such dishonesty and conceded that he was in no position to contradict the respondent's submissions on this point.
32After careful consideration of the parties' submissions, I can only conclude that the situation evolved and the facts changed after the applicant made his choice. The fact that the circumstances changed after the agreement was made is not a sufficient basis upon which to find that the respondent misled the applicant or got him to agree to the permanent layoff option under false pretences. The applicant made a choice based on the best information available at the time. It is unfortunate that he regrets that choice now, based on how things turned out. However, having upheld its end of the bargain, the respondent is entitled to rely upon its agreement with the applicant.
Terms of Agreement prevent applicant from proceeding at Tribunal
33The "Final Agreement" entered into by the parties contains terms whereby the applicant clearly agrees not to initiate any legal proceedings against the respondent. This would include his Application against the respondent under the Code. I have found that the applicant freely entered into this agreement and it is binding. It would therefore be an abuse of the Tribunal's process to permit the Application to proceed.
34The Application is dismissed.
Dated at Toronto, this 30th day of March, 2010.
"Signed By"
Sheri D. Price Vice-chair