Penalosa v. Teva Canada Limited, 2012 HRTO 1004

HUMAN RIGHTS TRIBUNAL OF ONTARIO

B E T W E E N:

Maria Magdalena Penalosa

Applicant

-and-

Teva Canada Limited and Urmilla Singh

Respondents

DECISION

Adjudicator: Douglas Sanderson

Date: May 16, 2012

Citation: 2012 HRTO 1004

Indexed as: Penalosa v. Teva Canada Limited

APPEARANCES

Maria Magdalena Penalosa, Applicant

Self-Represented

Teva Canada Limited and Urmilla Singh, Respondents

Evan VanDyk, Counsel

1This is an Application filed August 25, 2010, 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 because of disability, stemming from the organizational respondent’s decision to terminate the applicant’s employment while on medical leave.

2The respondents filed a Response wherein they requested early dismissal of the Application on the basis that the applicant signed a full and final release in exchange for an additional “gratuitous payment”. The respondents also assert that the Application should be dismissed because the applicant filed the Application outside of the one year statutory time limit set out in section 34 of the Code.

3By Registrar’s letter dated June 23, 2011, the Tribunal directed the applicant to respond in writing to the respondents’ request to dismiss the Application in light of the release the applicant executed in the respondents’ favour. The applicant responded on August 2, 2011 and the Tribunal scheduled a half-day preliminary hearing by teleconference to deal with the issues of the release and delay. The hearing was held on March 6, 2012.

Background

4The applicant worked for the organizational respondent from February 2003 until August 24, 2010. The applicant apparently experienced significant absenteeism in the latter years of her employment related to neck and back issues. On August 24, 2010, the organizational respondent met with the applicant and informed her that her employment was terminated. The organizational respondent took the position that the employment contract had been frustrated by the applicant’s excessive nonculpable absenteeism and her failure to cooperate in the return to work process.

5The organizational respondent paid the applicant ten weeks of termination and severance pay, pursuant to her entitlements under the Employment Standards Act, 2000, S.O. 2000. c. 41 and offered to make an additional “gratuitous” payment to her of five weeks’ pay in exchange for a full and final release and indemnity in favour of the respondents. In the cover letter to the release and indemnity, the organizational respondent asked the applicant to return the executed documents by September 4, 2009. The applicant requested, and was granted, additional time to consider her decision. The applicant executed the release on Sept 11, 2009. Under the terms of the release and indemnity, the applicant released the organizational respondent and its employees from, amongst other things, “…any and all claims under the Ontario Human Rights Code, as amended.” The applicant provided a cover letter to the release and indemnity in which she expressed her disagreement with the decision to terminate her employment. The applicant also stated, however, that she decided to bring the matter to a close and therefore returned the executed release, despite advice from family and friends that pursuing legal proceedings could benefit her.

Submissions

6The applicant reiterated that she did not accept the reasons the organizational respondent gave for the termination of employment. She also explained that she did not believe taking legal action against her employer “was Christian” until her minister explained to her that it was permissible provided the other party did not belong to the same church. The applicant submitted that she did not realize that the release and indemnity covered the individual respondent and stated the respondent should have brought this to her attention. The applicant explained that she missed the part of the release covering the individual respondent because she was distracted by financial issues in her family at the time and could not afford a lawyer. She also stated that she did not have time to review the document with anyone. The applicant submitted that the organizational respondent took advantage of her misunderstanding.

7The respondents submitted the applicant was given ample time to read and consider the indemnity and release. She clearly considered pursuing legal action, but decided to conclude the matter by executing the release and receiving the severance offered by the organizational respondent. At the time the organizational respondent presented the severance offer to the applicant, it had no reason to believe the applicant was considering a claim against any of its employees and therefore did not specifically point out that the release covered employees. Regardless, the first paragraph of the release clearly indicates that the applicant released the organizational respondent’s employees. The respondents submitted that the release clearly included claims under the Code and that it would be illogical for the applicant to release her employer, but not its employees. The respondents submitted that the applicant may have had a difficult choice to make, but the Tribunal found that in Jing v. Dell Canada, 2009 HRTO 1799 such a choice does not amount to duress and that lack of legal counsel does not invalidate a release.

Analysis and Decision

8The Code does not explicitly bar applications where an applicant has executed a release in favour of the respondents. See Bielman v. Casino Niagara, 2009 HRTO 123. Section 23(1) of the Statutory Powers Procedure Act, R.S.O. 1990, c. S.22, however, provides that a tribunal may make such orders or give such direction in proceedings before it as it considers proper to prevent abuse of its processes. The Tribunal has found on number of occasions that filing a human rights application after executing a full and final release amounts to be an abuse of process and dismissed the applications in question. See for example Shams v. Genivar Inc. 2012 HRTO 163 and Perricone v. Fabco Plastics Wholesale, 2010 HRTO 1655.

9First, it is necessary to consider whether the release at issue encompassed claims under the Code. As noted above, the release includes broad language releasing the respondent and its employees from “…any and all claims under the Ontario Human Rights Code, as amended.” Clearly the Code was included in the release.

10In Pritchard v. Ontario (Human Rights Comm.), 1999 CanLII 15058 (ON SC), 1999 CanLII 15058, 35 C.H.R.R. 39 (ON S.C.), the Court set out factors for determining whether a release should be set aside. Pritchard was decided under section 34 of the old Code, which invoked bad faith rather than abuse of process, and concerned access to the since repealed investigative procedure of the Ontario Human Rights Commission rather than the right to an oral hearing before the Tribunal. However, the Tribunal has found that the Pritchard factors can be useful in determining whether it would be an abuse of process to proceed with a hearing on the merits: Douse v. Hallmark Canada, 2009 HRTO 1254. The Pritchard factors look to (1) whether the party 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.

11I do not find that any of the Pritchard factors, or any other factors that might warrant overriding a full release, have been established in this case.

12The applicant clearly understood that signing the indemnity and release meant that she could not take legal action regarding her employment with the organizational respondent. She stated that she did not understand that the release covered the individual respondent. The language of the release clearly includes the organizational respondent’s employees in the groups covered by the release. The applicant states that she “missed” this point because of the financial pressure she was under and because she did not have time to review the document with someone else. The applicant communicates well verbally and in writing and I do not accept that she did not understand that the release covered the individual respondent, an employee of the organizational respondent. The applicant did not explain how the financial pressure she experienced prevented her from understanding the terms of the release. The applicant was not pressured to sign the document and was granted ample time to review, consider or to seek advice about it.

13The applicant did not assert that she was subject to duress when she signed the release. Rather, the applicant had to choose between pursuing litigation or resolving the matter with her former employer by accepting the severance package offered and executing a release. This was undoubtedly a difficult choice for the applicant, since she strongly disagreed with the decision to terminate her employment. However, the applicant evidently conferred with friends and family regarding this decision and came to the considered decision to accept the organizational respondent’s offer and she executed the release.

14In my view, the applicant was capable of understanding that the release applied to the individual respondent and she did not suggest that she was subject to pressure or duress to execute the document. To allow the Application to proceed in light of the clear language of the release prohibiting claims under the Code would amount to an abuse of process.

15Having found the Application to be an abuse of process, I need not address the issue of delay.

Order

16The Application is dismissed.