Dias v. Baycrest Centre for Geriatric Care, 2011 HRTO 1342

HUMAN RIGHTS TRIBUNAL OF ONTARIO

B E T W E E N:

John Dias Applicant

-and-

Baycrest Centre for Geriatric Care Respondent

DECISION

Adjudicator: Alan G. Smith Date: July 12, 2011 Citation: 2011 HRTO 1342 Indexed as: Dias v. Baycrest Centre for Geriatric Care

APPEARANCES:

John Dias, Applicant ) Self-represented Baycrest Centre for Geriatric Care ) David Chondon, Counsel Respondent )

BACKGROUND

1This is an Application filed on July 16, 2010, under section 34 of Part IV of the Human Rights Code, R.S.O. 1990, c. H.19, as amended (the “Code”). The applicant alleges discrimination based on age, which culminated in his termination by the employer respondent.

2In a Response dated September 23, 2010, the respondent requested early dismissal of the Application, relying on the terms of a Full and Final Release executed by the parties on June 9, 2010 (“Request to Dismis”)

3The applicant filed written submissions on October 5 and October 16, 2010 in response to the respondent’s Request to Dismiss. The respondent filed further written submissions on May 31, 2011.

4Pursuant to s. 43(2) of the Code an oral hearing was held before me on June 21, 2011. Both parties were present and made oral submissions with regard to the Request to Dismiss.

5At the beginning of the hearing both parties agreed that I could consider all written submissions (including the Application, Response and Reply) as evidence properly before me. Both parties understood and agreed that the hearing would be confined to hearing submissions with regard to the respondent’s Request to Dismiss on the basis of the signed release document and would not consider or deal with the applicant’s contention that he was subject to age discrimination contrary to the Code.

FACTS

6The pivotal facts are not in dispute. The applicant was employed by the respondent from August 30, 1999, to May 27, 2010. At that time of his termination the applicant was 59 years old. The applicant asserted in his Application that he was targeted for termination because of his age.

7In the termination interview of May 27, 2010, the applicant was offered two severance package options contained in a letter to him, the essential terms of which were as follows:

a) Continuation of regular salary for eleven months. With some employee benefits being continued until July 2011 and other benefits for the full eleven months. If alternate employment was obtained before July 2011, 50% of the remaining salary entitlement would be paid out and benefits discontinued;

b) A lump sum payment of $31,594.46 representing compensation for seven months (this amount would include entitlements pursuant to the Ontario Employment Standards Act, 2000). Benefits would continue until July 22, 2010.

8The May 27, 2010, offer also contained the following provisos:

…Please make your selection and indicate your acceptance through signing below and returning one copy of this letter as well as the full and final release. A copy of the release is enclosed. We suggest you take this opportunity to obtain such legal or other advice that you deem necessary.

Please advise Lana DeMeo, Advisor, Human Resources by 4:00 p.m. on June 3, 2010 of your decision and return the signed documents to him [sic]. This package offer expires at 4:00 p.m. on June 3, 2010. Should we not hear from you by this time, you will be paid the lump sum amount provided for under option B.

9Subsequent to the termination interview, the applicant was granted an extension of the offer expiry date to June 9, 2010.

10During the period between the termination interview and June 9, 2010, the applicant had several email discussions with Ms. DeMeo regarding details contained in the offer of May 27, 2010. In the course of the hearing the applicant also stated that he consulted with a “labour lawyer” during that period.

11On the afternoon of June 9, 2010, the applicant attended at Ms. DeMeo’s office where he read and signed a slightly revised version of the letter of May 27, 2010, accepting offer option “A” (salary continuation until July 2011). At the same time the applicant signed the release document which was provided to him with the offer letter on May 27, 2010. A portion of that release document reads as follows:

…I wholly release Baycrest from…any and all claims which I may have under…Ontario Human Rights Code…

…I further acknowledge and agree that the terms of this Release Agreement are fully understood by me; and that I have had independent legal representation in connection with this Release Agreement…and that this Release agreement is voluntarily entered into by me.

DECISION

12In his written submissions the applicant objected to the respondent’s Request to Dismiss on two primary grounds:

a) That he agreed to offer option “A” and signed the release “entirely under economic duress…I have a family, mortgage and daughter’s education to pay for”.

b) That the employer acted in “bad faith” by misrepresenting the fact that the applicant was terminated as a result of restructuring of the respondent’s business operations. This argument was supported by the fact that the applicant’s former position was allegedly posted on an internet job site.

13During the course of the hearing the applicant conceded that the fact that the employer may or may not have posted the applicant’s former position on an internet job site, “did not make any difference” with regard to whether his Application should be dismissed on the basis of the signed release. I therefore I find it unnecessary to address that portion of the applicant’s argument, and will deal only with the issue of economic duress.

14The terms of the Release clearly encompass an application made under the Code. However, accepting that the release expressly encompassed legal action related to human rights does not end the enquiry. In Bielman v. Casino Niagara, 2009 HRTO 123, 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.

15Thus, while the existence of a full and final release is not a statutory bar to continuing an application, 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, see Martinez v. Siemans Canada, 2010 HRTO 1027.

16The Tribunal has also 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, Kailani v. Securitas Canada, 2009 HRTO 1183 and Martel v. North Shore Community Support Services, 2010 HRTO 957. Section 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.

17It 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.

18Where “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, see Martel above.

19Black’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.

20Economic 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.

21The Ontario Court of Appeal described the elements of economic duress in a 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.

22In 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.

23In this case, I am not satisfied that the circumstances outlined by the applicant amount to the type of economic duress that would render the Release unenforceable. The applicant believes that he was experiencing discrimination under the Code and that his employment was wrongfully terminated. He could have chosen to not sign the release, receive the lump sum being offered as Option “B”, and then pursue his claim in the Tribunal or the Courts. He had almost two weeks to consider his options. After consulting with a lawyer, he chose to sign the release and thereby accept the enhanced payment option based on a salary and benefit extension.

24I cannot conclude that the applicant did not truly consent to the terms of the release, 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 agree to those terms. Although I do not doubt that the applicant was under financial pressure at the time he signed the release, I am not persuaded that the applicant had no free choice such that it was signed under “economic duress”, see Martel, above.

25Having regard to the terms of the release, I find it would be an abuse of the Tribunal’s process to permit the Application to proceed.

ORDER

26The Application is dismissed.