Daniel Morris v. Bemac Autobody Ltd. (Capital Collision Centre), 2011 HRTO 762

HUMAN RIGHTS TRIBUNAL OF ONTARIO

B E T W E E N:

Daniel Morris Applicant

-and-

Bemac Autobody Ltd. (Capital Collision Centre) Respondent

DECISION

Adjudicator: Faisal Bhabha Date: April 19, 2011 Citation: 2011 HRTO 762 Indexed as: Morris v. Bemac Autobody

APPEARANCES

Daniel Morris, Applicant (Self-represented) Bemac Autobody Ltd. (Capital Collision Centre), Respondent (Jennifer Birrell, Counsel)

1The applicant filed an Application on November 19, 2009, under s. 34 of the Human Rights Code, R.S.O. 1990, c. H.19, as amended (the “Code”), alleging discrimination in employment on the basis of disability.

2The Application was delivered to the respondent on December 14, 2009. The respondent filed a full Response on January 15, 2010, requesting that the Application be dismissed on the basis that the applicant has signed a full and final release with respect to the matter raised in the Application. By way of an Interim Decision, 2010 HRTO 868, dated April 21, 2010, the Tribunal determined that it was appropriate to hear evidence and argument relating to the respondent’s request for early dismissal.

3A hearing was convened in Ottawa on March 30, 2011. The applicant testified on his own behalf. For the respondent, Giuseppe (Joe) Frangioni and Louise Michaud testified.

THE FACTS

4The following is based on the materials filed, testimony of witnesses and the oral arguments of the parties. Where material facts were contested it is noted, and my findings are stated.

5The applicant began employment with the respondent automobile body shop as a “prepper” in August 2007. His job was to prepare vehicles for painting. Joe Frangione is a manager with the company, which is owned by his father and uncle. On or around July 18, 2009, Mr. Frangione and the shop manager, Louise Michaud, met with the applicant and told him that his performance was unsatisfactory. They warned him that if the quality of his work did not improve, his employment would be terminated. The applicant told them that he did not think there was anything wrong with his work.

6On August 19, 2009, the applicant was called into a meeting and was told his employment was being terminated. There was disagreement between the applicant’s recollection of the meeting and the testimony of Ms. Michaud and Mr. Frangione. The details of that meeting are central to the applicant’s position with respect to the release, so it is worth going through the events in some detail.

7The witnesses agreed that on August 19, 2009, the applicant was called into the manager’s office at around 8:30 a.m. Mr. Frangione and Ms. Michaud were there. According to the applicant, they told him that his services were no longer needed. They offered him the opportunity to finish off the week if he wished, but he said that he would prefer to complete two jobs and then leave. The applicant stated that he did not object or ask any questions about the termination, and that the meeting lasted no more than two or three minutes.

8According to Mr. Frangione and Ms. Michaud, when the applicant entered the meeting, they offered him a seat, but the applicant stood against a wall and refused to sit down. Mr. Frangione told him he was being let go because of performance issues and his failure to improve since the last meeting. Mr. Frangione testified that the applicant asked “why?” repeatedly.

9Mr. Frangione testified that a termination letter and release had been prepared in consultation with counsel in advance of the meeting. He brought three copies to the meeting—one for each of them—and handed a copy to the applicant. Although he did not read the letter out loud, Mr. Frangione testified that he summarized the main points to the applicant, explaining that the company was offering him three weeks’ pay in lieu of notice and employment counselling, and that in return the company required him to sign a release form.

10Mr. Frangione testified that he told the applicant that by signing this document, he would be prevented from suing the company for wrongful dismissal or for any other reason. According to Mr. Frangione, the applicant asked when his last day was, and was told he should leave immediately. The applicant said nothing further and asked no further questions. They agreed to meet again on August 31, 2009 to finalize the separation, giving the applicant time to think things over. The applicant left the meeting and proceeded to lock up his tool box, say good-bye to his co-workers and leave the premises

11Ms. Michaud corroborated Mr. Frangione’s account, though she could not recall whether they reviewed the terms of the letter and release in any detail. Both she and Mr. Frangione testified that at the conclusion of the August 19, 2009 meeting, they understood that the applicant was going to think about the company’s offer.

12The applicant testified that there was absolutely no mention of a termination letter or release during the August 19, 2009 meeting. He denied being given a document to review or that an appointment was made to meet again on August 31, 2009, though he conceded on cross-examination that it was possible a meeting was set for August 31st. He had no recollection of any discussion of terms of termination, payment of notice or severance or any other post-discharge issues. He stated that, while he signed nothing and was given nothing, he asked no questions and voiced no objections.

13The applicant stated that after leaving the meeting, he immediately went to look for work. Later that day, Ms. Michaud phoned the applicant and gave him a job lead, which he followed-up on. On August 21, 2009, the applicant began work as a prepper with another auto body shop.

14The parties agreed that on August 31, 2009, they met again. The applicant testified that he attended at Mr. Frangione’s office at Turpin Collision, another body shop owned by the respondent across the street from Capital Collision, at around 1:30 p.m. and that the meeting lasted “two-and-a-half to three minutes”. The applicant stated that this was the first time he saw the termination letter and release. Mr. Frangione presented it to him and told him that if he wanted the money he would have to sign the documents for it to be “released”.

15The applicant testified that he could not read the documents. He self-identifies as having limited literacy — about grade two or three level — though no objective evidence was admitted to corroborate this claim and the respondent challenged the applicant’s evidence on this point in cross-examination. The applicant asserted that he was incapable of reading and understanding the documents because of his poor literacy. He testified that, while he was not pressured, he “just did what Joe said”, that he “trusted Joe” and that he “needed the money”, believing the papers were necessary to obtain the funds owed to him. The applicant assumed he could not take time to think or get advice, though he did not ask for time or additional information even though he claims that he could not read the documents. He signed two copies and said nothing.

16Mr. Frangione testified that on August 31, 2009, he and Ms. Michaud met with the applicant in Mr. Frangione’s old office, located at Capital Collision, not at Turpin, across the street. He stated that the meeting occurred at around 12 or 12:30 p.m. The applicant also testified that Ms. Michaud was not at the meeting. Ms. Michaud’s testimony corroborated Mr. Frangione’s recollection that the meeting took place at Capital with all three present.

17Mr. Frangione testified that the meeting went quickly. The applicant arrived, signed two copies of the document, was given his Record of Employment and the cheque, and left. Mr. Frangione had heard through the industry grapevine that the applicant had begun working at another body shop. Ms Michaud testified that the applicant stated he had to “get back to work” and left the meeting quickly. The applicant testified that he had already been laid off from his other job. Mr. Frangione testified that he had spoken to the applicant’s new manager and understood that the applicant continued to work there until around the end of September 2009.

18The applicant testified that he went home from the August 31st meeting and had his wife read the documents to him. Only then, did he come to realize what he had signed. It was also then that he came to believe that the termination of his employment was related to his illness (he had been off work for several weeks). He concluded that the loss of his job must have had nothing to do with performance issues. That was the reason he subsequently filed the Application with the Tribunal. The applicant cashed the cheque and took no further steps in relation to the matter until he filed the Application on November 19, 2009.

19It is not necessary for me to make findings on all points of disagreement at this stage in the proceedings. One important finding, however, is that I am satisfied the respondent did provide the applicant with a copy of the termination letter and release on August 19, 2009. I do not find that there was any meaningful discussion about the content of the documents, but the preponderance of the evidence strongly suggests the applicant did receive the documents to take home and review on August 19th.

20The applicant’s position with respect to the termination documents is not credible. His memory was unclear with respect to several facts. Under cross-examination, he at times changed his position from asserting a fact with confidence to acknowledging the possibility of an alternative. Meanwhile, he insisted that his memory was correct, even in the face of directly opposing testimony on facts of minimal relevance, such as the location of the August 31st meeting, or whether Ms. Michaud was present.

21Aside from my observations of the witnesses, my preference for the respondent’s witnesses’ testimony is based mostly on the logical coherence of their account versus the applicant’s. For example, the letter, which was admitted into evidence, is dated August 19, 2009, not August 31, 2009. It offers employment counselling, which would have been redundant on August 31st, as the respondent believed the applicant was already re-employed. The cheque was dated August 26, 2009, which makes little sense if the offer was only being presented for the first time on August 31, 2009.

22Further, the letter contemplates independent legal advice, which would not make sense if the expectation was that the letter would be signed immediately without opportunity for review. Finally, it is not logical that the applicant would have simply accepted a verbal termination of his two-year employment on August 19th without asking any questions about vacation pay, notice or severance, or a record of employment. By the applicant’s own account, he had a reasonably open and friendly relationship with both Mr. Frangione and Ms. Michaud, and he did not feel intimidated by them.

23I also conclude that the August 31st meeting was scheduled during the August 19th meeting. On cross-examination, the applicant acknowledged that his memory may have been mistaken on this point and conceded that the second meeting might indeed have been scheduled at the end of the first. Again, this supports the respondent’s position that in the August 19th termination meeting, there was an agreement to meet again to finalize the separation. Further, a second meeting was needed in order for the applicant to drop off his uniforms, pick up his Record of Employment and, if he agreed to sign the release, to pick up his cheque.

24I acknowledge that the applicant faces literacy obstacles. While the respondent challenged the applicant’s evidence on this point, it is not a critical issue because it is clear on the evidence that the applicant has access to literacy assistance from his wife, who he admitted in testimony has assisted him throughout the Tribunal process, such as drafting his Application. It is therefore evident that the applicant had sufficient opportunity to obtain assistance in understanding the termination documents. I have found that he was handed a copy of the documents on August 19, 2009 and that he signed them on August 31, 2009. Whether he in fact obtained assistance or advice between August 19th and the 31st is unclear.

POSITION OF THE PARTIES

25The respondent’s position is that the applicant voluntarily entered into a full and final settlement of any and all claims arising from the termination of his employment. Although the release does not expressly refer to the Code, the respondent’s position is that it is sufficiently broad to include any and all claims, including a complaint of discrimination under the Code.

26Relying on Pritchard v. Ontario (Human Rights Comm.), 1999 CanLII 15058 (Ont. Sup. Ct.), respondent’s 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 was given time and afforded the opportunity to seek assistance to understand the significance of the release; he was not pressured or coerced; compensation was fair; and the applicant had the free choice to reject the offer, refuse to accept the payment, and commence legal proceedings. Instead, the respondent submits that the applicant sought to have it both ways: he signed the agreement, cashed the cheque and then, two months later, he filed this Application. The respondent argues that allowing the Application to proceed to a hearing would amount to an abuse of process.

27The applicant took the position that he did not understand the implications of signing the release. He claimed to have limited literacy, had no time to seek assistance with reading the document and instead relied on the respondent’s representation that the document needed to be signed in order to “release” the funds. The applicant’s position is that he needed the money and was willing to sign what was necessary to receive payment. He denies that he was given the opportunity to get advice and claims that he felt he had no choice but to sign.

ANALYSIS AND DECISION

28This 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 respondent to defend against the allegations of discrimination given that the applicant signed a document releasing the respondent from claims arising out of the termination of his employment. Specifically, the document releases the respondent:

…from any and all actions and causes of action, contracts (whether express or implied), claims and demands for damages, loss or injury, suits, debts, sums of money, indemnity, expenses, interest, costs and claims of any and every kind and nature whatsoever, at law or in equity, I [applicant] ever had, now have or may hereafter have existing up to and inclusive of the date of this Release by reason of or existing out of my employment with Employer or the termination thereof.

29Although the release does not explicitly refer to the Code, the language is sufficiently broad that I have no difficulty finding that it encompasses any existing or prospective claim under the Code.

30Given that the release encompasses human rights claims, the Tribunal must then 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. Respondents have a reasonable expectation that a release will bring finality to the employment relationship and any disputes arising from it. There are also reasons of public policy that weigh heavily in favour of upholding 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 private resolution of disputes.

31The Tribunal has routinely used the factors outlined in Pritchard, supra, to help determine whether overriding a release would constitute an abuse of the Tribunal’s process. See Parma v. Stoney Creek Lifecare, 2010 HRTO 501 (“Parma”). These factors look to (1) whether the applicant fully understood the significance of the release; (2) whether he 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.

32I do not find that applicant has established any of these factors in this case.

33The applicant claims that he did not understand the content of the document he signed on August 31, 2009. He further claims that after reviewing it with his wife later that day and learning what the release meant, he had no choice but to keep the money paid to him under the terms of the release. He testified that he “needed the money”. While there was some lack of clarity in the evidence as to when exactly the applicant cashed the cheque. I find that he did so after having a meaningful opportunity to review the terms of settlement and with full knowledge of the conditions of the release.

34While it may have been a difficult choice, the applicant did make an informed and free choice to keep the money. By doing so, he implicitly accepted the terms of the release, which by that time he fully understood. Importantly, there is no indication that the applicant at any time tried to repudiate or rescind the agreement. It was open to him to attempt to re-negotiate with the respondent, return the cheque or register his objections to the termination. He did nothing other than deposit the cheque. Several months later, in November 2009, he filed the Application.

35I have found as a factual matter that the applicant was handed a copy of the termination documents on August 19th. He would therefore have had nearly two weeks to review them with his wife and understand the meaning of the offer, including the obligations created under the release. It is possible the applicant did not take advantage of his opportunity to review the documents. The only alternative theory offered by the applicant was that he never saw the documents until the day he signed them. I have found this account implausible.

36However, even accepting the applicant’s claim that August 31st was the first time he saw the release and that he signed it without understanding it, it is also his evidence that he came to understand what the release meant on the same day that he signed it. He went home and had his wife explain it to him. The fact that he took no steps to object to or reverse the agreement until months later, while enjoying its benefits, casts doubt on the applicant’s version of events.

37The other factor on which the applicant relies is economic duress. The only evidence of the applicant’s financial hardship is his own testimony. He gave little detail as to the nature of the hardship or whether there were any exceptional circumstances that put him in an especially precarious situation beyond his claim that he “needed the money”. He did not file any documentary evidence to support his claim of financial hardship. Meanwhile, the respondent pointed to the fact that the applicant found work immediately after his employment was terminated.

38Most employees facing the termination of their employment will endure some degree of financial and emotional insecurity. However, the case law is clear that economic pressure alone is not sufficient to set aside a release. See Sinnett v. Orlick Industries, 2009 HRTO 916, at para. 24. The Tribunal has required evidence of “improper pressure” or “coercion” to establish economic duress. See Kailani v. Securitas Canada, 2009 HRTO 1183 at para. 30 and Parma at para. 31. The applicant admitted in his testimony that he was not coerced or threatened into signing the release. There is therefore no basis for finding that the applicant’s signing of the release was involuntary.

39While there was some dispute as to how long he retained his subsequent employment, there is no doubt that the applicant mitigated his losses at least in the month of August 2009, which is the relevant time period. I do not find it likely in these circumstances that, at the time the applicant was deciding whether to accept the respondent’s termination proposal, he was under any economic duress.

40The applicant also admitted in his testimony that he had a decent relationship with management throughout his employment, and felt that he could speak openly to Mr. Frangioni and Ms. Michaud. Yet, the applicant failed to give a plausible explanation for why he remained largely silent throughout both meetings — he asked no questions, voiced no objection to what he believed was an unfair termination of employment, and sought no additional time to think about the offer and confer with his wife.

41Looking at the circumstances as a whole, there are no factors that would lead the Tribunal to set aside the terms of the settlement. It would be an abuse of process to allow the Application to proceed.

42The Application is accordingly dismissed.