Hostick v. Great West Life Assurance Company, 2014 HRTO 1207

HUMAN RIGHTS TRIBUNAL OF ONTARIO

B E T W E E N:

Daniel Hostick Applicant

-and-

Great West Life Assurance Company Respondent

DECISION

Adjudicator: Yola Grant Date: August 12, 2014 Citation: 2014 HRTO 1207 Indexed as: Hostick v. Great West Life Assurance Company

APPEARANCES

Daniel Hostick, Applicant William Gale, Counsel

Great West Life Assurance Company, Respondent Graham Nattress, Counsel

Introduction

1This Application alleges discrimination with respect to employment because of age contrary to the Human Rights Code, R.S.O. 1990, c. H.19, as amended (the “Code”).

2The respondent employer requested that the Application be dismissed as an abuse of process as the applicant had executed a full release in connection with any claim arising from his employment.

3The applicant filed a response to the request for dismissal and requested an opportunity to make oral submissions pursuant to s.43(2) of the Code. The summary hearing was held on May 30, 2014.

4For the reasons stated below, this Application is dismissed. The applicant has not presented any basis for resiling from the release. To require the respondent to participate in a full hearing of the merits of a claim that it has fully and finally settled would be an abuse of the Tribunal’s process.

ANALYSIS AND DECISON

5In respect of the release, the applicant asserts that it is void as the “separation package and included release” expressly contracted out of the termination notice and benefits continuation provisions of the Employment Standards Act, 2000, S.O. 2000, c.41, as amended (“ESA”). In the alternative, it is in the public interest that the release does not bar a human rights complaint as the applicant was unaware of the “the discriminatory motives for his dismissal” and relied on the respondent’s misrepresentation of the reason for his termination at the time of executing the release.

6At the time of his termination, the applicant was the respondent’s Regional Director, Sales and Marketing Centre, Northern Ontario. The applicant claims damages in the amount of approximately $1.5M for remedy for the alleged breach of the Code arising from the termination of his employment of over 23 years.

7He alleges that he was unlawfully terminated on the purported basis that his position was being eliminated. After accepting a severance package and signing a release in favour of the respondent employer, the applicant alleged that he subsequently learnt that he and an older colleague were the only employees terminated while other Regional Directors retained their employment (some through lateral moves) and some other junior employees were promoted to “Regional Sales Director”. In addition, the applicant alleged that the respondent misrepresented his departure as “retirement” in a companywide announcement and held a “private retirement party” that underscored the age-based motives for the applicant’s termination. Subsequent to signing the release, the applicant also alleged that he was informed that he was not entitled to a bonus payment for the fiscal year 2012.

8The Code does not explicitly bar applications where an applicant has executed a release in favour of a respondent but the Tribunal has authority to prevent an abuse of its process: subsection 23(1) Statutory Powers and Procedures Act, R.S.O. 1990, c. S.22, as amended. On a number of occasions, the Tribunal has found that filing an application after executing a release may amount to an abuse of its process: Perricone v. Fabco Plastics Wholesale, 2010 HRTO 1655; Wedderburn v. Air Liquide Canada, 2010 HRTO 691; Dieter v. Transcontinental Printing Inc., 2012 HRTO 2171. The Tribunal in Perricone (at para. 39, citing Toronto (City) v. C.U.P.E. Loc. 79, 2003 SCC 63, [2003] 3 S.C.R. 77) has applied the doctrine abuse of process in the context of a Release as follows:

When two parties contract to settle legal matters between them, the principle of finality, demands that the contract be given effect and prevents parties from litigating settled matters, unless there are compelling reasons to set the contract aside altogether. Thus, in determining whether it would be an abuse of process to permit the Application to proceed, the question is not whether the applicant filed her Application in bad faith, but weather the contract (i.e. the Release) she entered into is legally binding and final.

9In the instant matter, the applicant claims that he was induced to sign the release because of the respondent’s “fraudulent misrepresentations about the reasons for his dismissal”. The applicant further claimed that “the respondent led the applicant to believe that signing the release would not affect his entitlement to 2012 bonus payment.” The applicant urges the Tribunal to find that these alleged misrepresentations warrant overriding the plain language of the release and takes the position that he should be permitted an opportunity to test the respondent’s evidence on the reasons for his dismissal. The applicant cites two decisions of the Tribunal that explored alleged misrepresentation of reasons for dismissal: Wedderburn v. Air Liquide, above, and Luo v. Dell Canada, 2010 HRTO 879.

10In Wedderburn and Luo, the applicants put forward information concerning their respective employer’s continued employment of colleagues who they had understood were to be terminated at the same time as the applicants for the same business reasons. After signing releases, Wedderburn and Luo claimed Code violations based on disability and gender (pregnancy) respectively as they were the only workers in their respective workplaces whose terminations were carried out, although it appeared that a larger group was laid off. In the instant case, the applicant and his 71-year-old colleague were the only ones terminated when the complement of Directors was reduced from 12 to 10. This fact was readily discoverable by the applicant before he accepted the severance package in December 2012. The mere assertion that sometime in the 12 months between his dismissal and the filing of the instant application the respondent had reverted to 12 rather than 10 senior Directors is an insufficient basis to support a claim of misrepresentation to void the release. There are no new facts pertaining to employment and age that have unfolded since the release was signed. Having considered the matter, I find that it is not necessary, nor is it appropriate, for the Tribunal to hear evidence with respect to the alleged inducements or misrepresentation to execute the release.

11The wording of the instant release is unambiguous. The terms of the release executed by the applicant indicates that in exchange for a significant sum of money, he voluntarily relinquished his right to file complaints regarding the Code and the ESA. It is undisputed that in the release signed on December 10, 2012, a copy of which was provided to the applicant on November 12, 2012, with the letter of termination and severance election, the applicant expressly agreed:

a. to not make a claim under the Code;

b. that he had been given the opportunity to obtain independent legal advice;

c. he was provided with severance payments of (23.5 months’ wages and a further sum for loss of benefits);

d. that “there have been no representations or statements made by the employer or on behalf of the employer on which the employee relies or which induced the employee to sign this release”; and,

e. that the release was a full and final settlement of all claims.

12The applicant had the benefit of independent counsel (and referred to his counsel in email communication with the respondent). He also had a one-month lapse between obtaining the release to the time of executing it. He had time to gather facts to dispel any suspicion he may have had regarding his age being a factor in the decision to re-organize the management structure and eliminate his position. I note that in one email exchange he commented favorably on the promotion of two employees that resulted from the re-organization. He (and his counsel) also had time to address any concern he may have had with not being offered a lateral move like some of the other affected directors and to include his entitlement to year-end bonus pay in his negotiation of his exit package.

13The release satisfies all the requirements for enforceability. The terms are clear, there was reasonable consideration, there was opportunity for reflection and obtaining legal advice and applications under the Code were expressly mentioned. The applicant has not put forward any compelling reason for the Tribunal to look beyond the release as was done in both cases (Wedderburn and Luo) where the employers retained employees who were initially terminated along with the applicants.

14In the alternative to voiding the release for misrepresentation, the applicant submitted that the release was void from the outset and invited the Tribunal to interpret the ESA to find that the release was in breach of that statute. The applicant asserted that the respondent breached the sections of the ESA specifically dealing with “no contracting out”, termination notice, and continuation of benefits: ss.5(1), 57 and 61(1)(b), respectively.

15The breach alleged by the applicant hinges on the respondent’s attribution of 7 weeks (rather than 8) of his paid common law notice to ESA notice entitlement and the failure of the respondent to continue various benefits for the entirety of the statutory notice period.

16The respondent pointed to subsection 5(2) of the ESA, dealing with “greater right or benefit” as providing a full answer to the applicant’s assertions:

If one or more provisions in an employment contract or in another Act that directly relate to the same subject matter as an employment standard provide a greater benefit to an employee than the employment standard, the provision or provisions in the contract of Act apply and the employment standard does not apply.

17I note that the applicant was silent regarding the application of the severance pay provision (s.64 ESA) or the pay instead of notice provision at s.61(1) ESA. Similarly, the applicant was silent regarding failed contributions to benefits plan during the statutory notice period being deemed unpaid wages pursuant to s.60(3) ESA.

18Both parties agreed that the Tribunal, in determining matters under the Code, has the authority to interpret the ESA,. Below, I provide my reasons for rejecting the various assertions by the applicant based on the plain and ordinary meaning of various provisions of the ESA.

19It is trite law that the “greater right or benefit” clause set out above is intended to afford employees any greater right or benefit that is available to them by way of a collective agreement, personnel policy, individual contract, etc. that governs employment relationships. In instances like the present situation, this provision is also typically interpreted to permit an assessment of whether the severance package offered to the employee (to obtain a release) meets or exceeds the ESA entitlements. In the case of the applicant, who had 23.5 years of service, it is uncontested that he was paid one month’s wage per year of service, far in excess of his ESA notice and severance entitlements combined. It was also uncontested that the applicant continues in sales with the employer on a commission basis, without any set-off for the duty to mitigate during the paid notice period that is (currently) afoot until October 2014.

20It thus strains credulity for the applicant to claim that the release effectively “contracted out” of the ESA. The respondent’s mere misstatement of the applicant’s statutory entitlement does not constitute a breach of the ESA. Given that the applicant received common law notice pay far in excess of his eight weeks’ statutory notice entitlement, it is manifest that there is no real breach of the ESA regarding notice pay.

21Regarding the applicant’s claim that the respondent failed to provide for the continuation of benefits during the notice period, I note that it is uncontested that the applicant received $50,000 in consideration in lieu of benefits during the common law notice period. I need not comment on the applicant’s speculation regarding scenarios that may have developed if he had experienced a disablement during the statutory notice period in the absence of continued benefits. At the time of the hearing before the Tribunal, it was clear that the applicant’s argument was academic only and there no was quarrel with the sufficiency of the $50,000 consideration.

22The applicant relied on the decision of the Ontario Superior Court (Small Claims Court) in Mattiassi v. Hathro Management Partnership, [2011] O.J. No. 4774, for the proposition that employment standards are distinct and cannot be combined or offset against each other. I am not convinced that the Mattiassi decision has any application here as that case decided that termination notice and severance are distinct and cannot be combined or offset against each other. I note also that the Court in Mattiassi cited s.65(7) of the ESA for support for the conclusion that Mattiassi’s extended working notice could not be set off against her entitlement to a lump sum severance payment, as she was entitled to wages for actively working during the notice period. The applicant’s situation is vastly different as he was paid nearly 2 years’ wages in lieu of working notice and was afforded a position with his employer that permitted him to earn commissions without any set-off for mitigation of wage loss on termination.

23Furthermore, I am not persuaded that the employer’s obligation to continue benefits can only be satisfied by performance of same. The ESA contemplates that any failure by an employer to contribute to a benefits plan during the statutory notice period can be remedied by an order that treats the contribution amount as unpaid wages: ss.60(3) and 103 of the ESA. The ESA does not bar an employee from receiving his entitlement to the continuation of benefits during the statutory notice period as cash, as was done in this instance.

CONCLUSION

24In signing the release, with the benefit of independent legal advice and four weeks to reflect on its terms, the applicant clearly agreed to not initiate any legal proceedings against the respondent, including applications under the Code and ESA.

25The applicant sought to rely on alleged breaches of the ESA to attack the release by claiming it was void from the outset. Based on my analysis, there is no reason to conclude that the release should not be given effect in respect of claims under the Code.

26Notwithstanding the applicant’s speculation that his age may have tainted the decision to eliminate his position in a re-organization of the management structure that he came to view as a sham, the public interest in better served by respecting the finality of contracts and preventing an abuse of the Tribunal’s process. No compelling reason has been advanced for the Tribunal to permit the applicant to resile from the release and proceed with the instant application.

ORDER

27The Application is dismissed.