Noel Lawrence v. TR Controls Inc. and Tod Warner, 2011 HRTO 226

HUMAN RIGHTS TRIBUNAL OF ONTARIO

B E T W E E N:

Noel Lawrence

Applicant

-and-

TR Controls Inc. and Tod Warner

Respondents

Decision

Adjudicator: Ailsa Jane Wiggins

Date: February 1, 2011

Citation: 2011 HRTO 226

Indexed as: Lawrence v. TR Controls

AppearanceS

Noel Lawrence, Applicant ) Self-represented

TR Controls Inc. ) Christopher White,

and Tod Warner ) Counsel

Respondents )

)

Introduction

1This Decision addresses the issue of whether this Application should be dismissed because the applicant signed a full and final release of claims against the respondents.

Background

2This Application was filed on June 29, 2009, under section 53(5) of Part VI of the Human Rights Code, R.S.O. 1990, c. H.19, as amended (the “Code”). The underlying human rights complaint (the “Complaint”) was filed with the Ontario Human Rights Commission (“Commission”) on November 18, 2005 and abandoned upon filing this Application with the Tribunal.

3The applicant alleges that he was discriminated against in his employment on the basis of age, ancestry, disability, place of origin and race.

4In March 2005 the applicant was advised that he had a heart condition that would require surgery. He was dismissed from his employment in May 2005. He was in his early 60’s. The applicant is English. He alleges that the individual respondent called him a “limey” and made disparaging remarks about English people.

5The respondents deny that the applicant was discriminated against and maintain that he was dismissed as part of a restructuring which had been under consideration for months prior to the applicant’s dismissal.

6The termination meeting was held on May 19, 2005. The applicant was offered a severance package of up to six months of salary continuation in exchange for a release. He was given until May 30, 2005 to accept the offer.

7The termination letter stated that the applicant “may wish to seek legal direction” and went on to advise him to do so.

8The release released the employer from all claims relating to the applicant’s employment and the termination of his employment including claims under the Code. The applicant signed the release on May 27, 2005.

9The date of the applicant’s final salary continuation payment was November 18, 2005. The applicant filed his Complaint the same day.

10In his Complaint the applicant stated that he signed the release “under acute financial, physical and emotional duress.”

11In their Response to the Application the respondents submitted that the release was binding on the applicant and asked that the Tribunal dismiss the Application. The Response also stated that filing the Complaint immediately after receipt of the final salary continuation payment demonstrated bad faith.

12The Tribunal scheduled a preliminary hearing to determine whether the Application should be dismissed.

Submissions of the Parties

13Counsel for the respondents noted that the applicant was given 11 days to consider the employer’s offer, he was encouraged to obtain legal advice and he did so. Counsel pointed to the applicant’s January 12, 2006 letter to the Commission in which he stated:

I did seek legal advice and was told that the offer of salary continuation was mean spirited and minimum at best but that the cost of getting a more equitable and fair agreement would be prohibitive to me financially.

14Counsel for the respondents argued that the offer of 26 weeks of salary continuation was a significant improvement over the applicant’s statutory entitlement to 18 weeks termination and severance pay. He also noted that there was some dispute as to the applicant’s status – he may not have been an employee for the entire 10 year period and as such may have been entitled to less than 18 weeks termination and severance pay.

15Counsel for the respondents also noted that during the eleven day period that the applicant was given to accept the offer the applicant did not either ask for an extension to the period or for any improvements to the offer.

16Counsel for the respondents asked the Tribunal to exercise its discretion under section 23(1) of the Statutory Powers Procedure Act, R.S.O. 1990, c.S.22, as amended (SPPA) and dismiss the Application. Section 23(1) of the SPPA reads as follows:

A tribunal may make such orders or give such directions in proceedings before it as it considers proper to prevent abuse of its processes.

17Counsel for the respondents referred me to several cases in support of the respondents’ position.

18In James v. Evonik Degussa Canada, 2009 HRTO 555 the applicant was given a week to review a severance package and to seek independent legal advice. He accepted the package and signed the release. The applicant received all the payments due under the severance package and then initiated a human rights complaint. The Tribunal found that there was no basis for concluding that the applicant signed the release under pressure or that undue influence was brought to bear by the respondents. The Tribunal concluded that given all the circumstances it would be manifestly unfair to the respondents and an abuse of the Tribunal’s process to allow the Application to continue.

19In Dube v. Rock Haven Recovery 2009 HRTO 53 the applicant was offered a modest severance package in exchange for a release. Despite the release he filed a human rights complaint and began a small claims court action for wrongful dismissal. He signed a second release in respect of the small claims court proceeding without advising the respondents of the human rights complaint. The respondents only became aware of the human rights complaint when it was forwarded to them by the Commission several weeks later. The applicant claimed that during the period he was given to consider the offer he was unable to obtain legal advice or get an extension of time. The Tribunal found that the applicant, who was not unsophisticated and could read and write English with proficiency, was under no more pressure than any other employee who has been summarily dismissed by his employer. The Tribunal held that the filing of the Application was an abuse of its process.

20In Kailani v. Securitas Canada, 2009 HRTO 1183, the applicant was terminated and the resulting grievance was settled. Less than two weeks after signing the memorandum of settlement the applicant filed an Application with the Tribunal. The applicant testified that he understood that under the terms of the memorandum he could not bring any claim against the respondent but he argued that he signed it under duress and that the signing of a memorandum of settlement should not deprive a person of the ability to assert their human rights. The Tribunal noted that the test for whether a person has signed a settlement under duress is high and that in this case if there was duress it was economic duress – he was financially responsible for his family, had no income as a result of his dismissal and would qualify for employment insurance benefits if he agreed to the settlement. The Tribunal concluded that the applicant was not under sufficient duress as to cause it to look behind the plain meaning of the memorandum and that it would be an abuse of process to proceed with the Application.

21In Kailani the Tribunal noted (at para. 35) that:

The fact that a person has settled with a former employer does not automatically bar the person from bringing an Application even if the settlement released the employer from future claims. Each case must be considered on its own merits and economic duress is a factor that may be considered. However, it seems apparent that the test for economic duress is high. Most people who have had their employment terminated are faced with economic difficulty. Financial difficulty alone cannot therefore be sufficient. If it were, almost every settlement arising out of the termination of employment could be violated.

22In Titus v. William F. Cooke Enterprises Inc., 2007 ONCA 573, the respondent accepted a settlement package, signed a release and was paid the settlement funds. A few months later he commenced an action for wrongful dismissal and requested that the release be set aside as unconscionable or as having been procured under undue influence or duress. The Ontario Court of Appeal applied the test for unconscionability set out by the Alberta Court of Appeal in Cain v. Clarica Life Insurance Co., 2005 ABCA 437, a case dealing with the doctrine of unconscionability in a wrongful dismissal setting (at para. 38 of Titus):

The four necessary elements are

1. a grossly unfair and improvident transaction; and

2. victim’s lack of independent legal advice or other suitable advice; and

3. overwhelming imbalance in bargaining power caused by victim’s ignorance of business, illiteracy, ignorance of the language of the bargain, blindness, deafness, illness, senility, or similar disability; and

4. other party’s knowingly taking advantage of this vulnerability.

23The applicant in the Application before me testified that at the time of his dismissal he was under a lot of stress because of his heart condition and because his wife had a serious medical condition.

24The applicant testified that he contacted the Commission after he was dismissed and that the Commission told him he had six months to file a complaint. He said the Commission made him think he had a good case to get a better severance package, a better deal.

25The applicant said that he consulted a friend who was lawyer. He said he did not engage his friend’s firm because he could not afford it. His friend’s firm is a large firm with many practice areas including employment law. The applicant admitted that he understood the release and that his lawyer friend had reviewed it with him. His friend told him it was a low offer but that a lawsuit would be fruitless.

26The applicant testified that he was savvy enough to know that the release might not stand up. He said that as he understood contract law it had to be fair to both parties.

27The applicant argued that his Application should not be dismissed because when he signed the release he and his wife were in poor health and he was under financial stress having gone into debt prior to his dismissal to renovate their residence.

DECISION

28A release is not an automatic bar to bringing a human rights compliant. Each case must be considered on its own merits. The decisions cited by the respondents’ counsel refer to the factors to be considered when determining whether a release should be a bar to a subsequent legal proceeding such as a human rights application and whether to allow a human rights application to proceed in the face of a release would be an abuse of the Tribunal’s process.

29The factors to be considered include the following.

• Did the applicant obtain legal or other suitable advice?
• Was the settlement grossly unfair to the applicant?
• Was the applicant ignorant of business, illiterate, lacking in language skills or suffering from a disability?
• Was undue pressure put upon the applicant to sign?
• Did the applicant sign under duress, including economic duress?
• Did the respondent take advantage of the applicant’s vulnerability?

30Applying those factors to the present case I find that the Application should be dismissed. To allow it to proceed would be an abuse of the Tribunal‘s process.

31The applicant obtained legal advice. While at the hearing he tried to suggest that he only spoke to a friend who was a lawyer, he admitted to having reviewed the release with his lawyer friend and in his letter to the Commission he said that he had obtained legal advice.

32The settlement was not grossly unfair to the applicant. While 26 weeks of salary continuation may be below the low end of the range of reasonable notice at common law for an employee in his position and of his age and length of service, it was not so low as to be grossly unfair. It was more than the applicant’s statutory minimum entitlement and his lawyer friend advised him that it would not be worth it to sue.

33The applicant was an experienced business man with strong language skills. He admitted to understanding the terms of the release.

34The applicant and his wife had health issues but the applicant’s was a heart condition, not a disability which might affect his ability to understand the release or affect his capacity to enter into an agreement. Indeed, as indicated earlier, he admitted to having understood the release.

35No undue pressure was put on the applicant to sign the release. He was given 11 days to consider his employer’s offer. He signed it shortly before the end of the 11 day period and he did not request an extension.

36The applicant was not under duress, economic or otherwise. While his health and his wife’s health would have caused him to be stressed, he was able to consult a lawyer and decide upon a course of action. The applicant was also stressed due to his finances. He was in debt and he had financial concerns prior to his dismissal. However, as the cases indicate, the test for economic duress is a difficult one to meet. The applicant no doubt had financial worries, most employees who lose their jobs do, but he was not in sufficient financial difficulty to be found to be under economic duress.

37There was no evidence to indicate that the respondents took advantage of the applicant’s vulnerability. They gave him more than a week to consider the offer. During that time he sought legal advice and made no attempt to negotiate a better offer. It appears that he decided to take his chances, sign the release, obtain the full settlement package and then file a human rights complaint hoping the release would not be a bar and that he could obtain a better settlement through the human rights process.

38In my view, under the circumstances of this case, it would be grossly unfair to the respondents to allow the Application to continue.

39For these reasons the Application is dismissed.