Jacqueline Nicastro v. Tenaris Algoma Tubes Inc., 2016 HRTO 1128

Human Rights Tribunal of Ontario

Between:

Jacqueline Nicastro Applicant

-and-

Tenaris Algoma Tubes Inc. Respondent

Decision

Adjudicator: Brian Eyolfson Date: August 24, 2016 Citation: 2016 HRTO 1128 Indexed as: Nicastro v. Tenaris Algoma Tubes Inc.

Appearances

Jacqueline Nicastro, Applicant Brian DeLorenzi, Counsel

Tenaris Algoma Tubes Inc., Respondent Paul Cassan, Counsel

Introduction

1This Application was filed under s. 34 of Part IV of the Human Rights Code, R.S.O. 1990, c. H.19, as amended (the "Code"), on May 11, 2015, and alleges discrimination in employment on the basis of disability and age. The applicant commenced employment with the respondent in 2000, and her employment as a Benefits Analyst in the respondent's Personnel Administration Department was terminated on June 30, 2014.

2The respondent filed a Request for Dismissal without Full Response ("Request"), on June 29, 2015, on the basis that the applicant signed a full and final release on July 4, 2014, confirming that she had no claims under the Code. The respondent submitted that the applicant's employment was terminated as a result of a reduction of employees in her department. The respondent also submitted that the applicant was offered a generous severance package that included payment in lieu of 52 weeks' salary, pension, and a bonus, which she accepted with the addition of one month of benefits. The respondent included copies of a termination of employment letter addressed to the applicant and the signed release with its Request.

3The applicant filed a Response to a Request for an Order ("Response"), on September 18, 2015, submitting that she signed the release under economic duress and that there was misrepresentation by the respondent.

4By Case Assessment Direction dated September 28, 2015, the Tribunal decided to hold a preliminary hearing by conference call to determine whether the Application should be dismissed, in whole or in part, on the basis that the applicant signed a full and final release with respect to the same subject matter of the Application, and that it would be an abuse of the Tribunal's process to hear the Application.

Preliminary Hearing

5The applicant gave evidence at the preliminary hearing, and Mark Rehoric, Industrial Relations Manager, Tenaris Canada, testified on behalf of the respondent.

Mr. Rehoric

6Mr. Rehoric testified that he is the head of human resources and labour relations for the respondent in Canada, and oversees hiring and termination. He explained that the respondent manufactures pipe for the oil and gas industry. He testified that in 2011 the respondent had approximately 1400 employees across Canada and was looking to operate more efficiently. He explained that "shared services", or moving administrative functions starting with payroll and then other functions to other facilities and reducing personnel in Canada, was part of that.

7Mr. Rehoric referred to a chart concerning "Shared Service Reduction in Personnel Administration" that was attached to the respondent's Response to the Application. He explained that staff in the applicant's department in Canada was to be reduced from seven to four as part of shared services, which started around 2013, and that the applicant would have been part of the reduction. He testified that it was known throughout the company, on an ongoing basis in 2013 and 2014, that a lot of administrative duties would be moved to shared services. With respect to Canada, the chart indicates a proposed reduction of two of three senior analyst positions, while two junior analyst positions are maintained.

8In cross-examination, Mr. Rehoric testified that in payroll in Canada the employment of one individual was terminated in 2011, which was not part of shared services. The employment of a second individual was terminated in July 2013, as part of shared services. The applicant was next, after which there was a retirement six months later. He testified that, after the applicant's employment was terminated, the next employment termination in human resources based on shared services was in 2015.

9Mr. Rehoric also testified that the respondent had about 550 employees in Canada as of December 2015, and that the total workforce in Canada was expected to drop to about 100 employees in 2016.

10Mr. Rehoric testified that before the applicant's employment was terminated there was a position in accounts payable that they were hoping the applicant would move to but she decided to withdraw her application for that position. He testified that the applicant was the only internal candidate for the position and after she withdrew her application they had to look externally.

11In cross-examination, he testified that the accounts payable position was posted at the end of 2013, and they encouraged the applicant to apply because there was a possibility that her employment would be terminated. He testified that they still have one accounts payable position.

12Mr. Rehoric testified that he was involved with the decision to let the applicant go and that it had been coming for a long time in relation to shared services. He testified that the applicant was well liked and they put together a package wanting to make sure she was taken care of. They proposed a payment representing 52 weeks of salary and payments in lieu of pension, benefits and a bonus, which was more than double her entitlement under the Employment Standards Act (the "ESA").

13Mr. Rehoric testified that typically they end benefits coverage on the day of termination, but the applicant came back and asked for an extension of her benefits. He testified that they agreed and crossed out the June 30, 2014 date in the termination of employment letter, and wrote July 30, 2014 instead, which he believed the applicant initialed. He also testified that they gave the applicant until July 8, 2014 to return signed copies of the letter and a release, but that many employees have asked for an extension for many different reasons and they have always granted an extension. Mr. Rehoric testified that if an employee refused to sign, which has never happened, the respondent would pay out the ESA entitlement. He testified that the ESA entitlement cannot be withheld and has to be paid no matter what.

14Mr. Rehoric referred to the release signed by the applicant on July 4, 2014, including the final paragraph which states, in part, "I hereby declare that I have had the opportunity to seek independent legal advice with respect to the matters addressed in this full and Final Release and fully understand it." He testified that the applicant's spouse is a human resources professional, and worked with the respondent from 2000 to 2005 in labour relations. He testified that the applicant's spouse signed the release as a witness and brought the signed documents to the respondent. Mr. Rehoric testified that, apart from the request to extend the applicant's benefits, no other change was requested, nor did the applicant ask for more time.

15In cross-examination, Mr. Rehoric testified that the respondent knew the applicant had medical issues the year prior to the termination of her employment as she had a car accident. He testified that the respondent was not aware the applicant had any medical issues at the time they released her.

The Applicant

16The applicant testified that she worked for the respondent for 13.7 years. Prior to the termination of her employment, she was aware of shared services and that there may be cutbacks, but she thought that in human resources there probably would not be that many. She testified that she did not know that she was being considered in terms of cutbacks at all, and that she probably had the highest seniority.

17The applicant testified that another individual she worked with who did payroll had her employment terminated about a year before her, and she was on disability prior to her termination. The applicant knew that the termination of the other individual's employment was a business decision, but she did not necessarily know it was part of the shared services plan. She testified that she was not aware of any other terminations in her department, but agreed that there was a pretty large termination about eight or nine months after she left. Someone said it was because of a downturn in the market.

18The applicant testified that the respondent told her in a meeting room that they had to let her go because of a business decision. She looked at a letter which stated that she would be provided with 12 months of salary. She was told that she was just the first of many to be terminated and that 12 months is pretty good. She asked if she could just get the letter and leave and she went home. She testified that there was no discussion about benefits that day, and no discussion about what would happen if she did or did not sign the release, or about getting advice before signing the release.

19The applicant testified that she did contact Mr. Rehoric because the letter stated her benefits ended the day her employment was terminated and she needed medication. She asked him for benefits until July 30, 2014, and he put in a new date. She also asked him for a letter of reference which she received.

20The applicant testified that during the five-day period prior to signing the release she was really upset, and she did not want to talk to anyone. She testified that the respondent called her and they were concerned about her welfare. She referred to having daughters in university and tuition due the next month. She testified that she had no money to hire or consult a lawyer, and she was "a mess". She believed that if she did not sign the release the money would be delayed, but she was not sure for how long, and that the respondent would hold whatever was not resolved and she may not have benefits. In cross-examination, the applicant agreed that she knew the benefits plan, and testified that she helped employees resolve claims. She also worked with and dealt with lawyers while employed with the respondent.

21The applicant described medical conditions she had while she was employed with the respondent, and testified that she was off work for maybe three weeks in 2013. She was also in a car accident. She testified that the respondent knew of her medical situation, and she provided the respondent with a copy of her medical notes. In cross-examination, the applicant testified that the car accident was in April 2013, and that all her other medical issues were just before the accident, but she had ongoing issues with arthritis. She agreed that, at the time her employment was terminated in 2014, she was not on any "accommodations".

Analysis and Decision

22Section 23(1) of the Statutory Powers Procedure Act, R.S.O. 1990, c. S.22, as amended ("SPPA"), 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. (See also Social Justice Tribunals Ontario Common Rule A8.1) The Tribunal has 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. See, for example, Stansens v. Liquor Control Board of Ontario, 2009 HRTO 1560, Sinnett v. Orlick Industries, 2009 HRTO 916, and Douse v. Hallmark Canada, 2009 HRTO 1254.

23First, it is necessary to consider whether the release at issue encompassed claims under the Code. The "FULL AND FINAL RELEASE" signed by the applicant includes broad language releasing the respondent, as follows:

... from any and all claims or demands that I have ever had, now have, or could ever have against Tenaris and in particular, any matters that in any way relate to:

a) my employment with Tenaris;

b) the termination of my employment by Tenaris; and

c) any and all claims for damages, salary, wages, termination pay, severance pay, vacation pay, commissions, bonuses, allowances, incentive payments, insurance or any other benefits arising out of my employment relationship with Tenaris.

24The release also includes the following provision specifically addressing the Code:

For the same consideration, I hereby confirm that I have no claims under the Ontario Human Rights Code against Tenaris and that I hereby represent and warrant that I have made no complaints to the Ontario Human Rights Commission against Tenaris and will not do so in the future with respect to any matter to the date of the Release.

25In Better Beef Ltd. v. MacLean, (2006), 2006 CanLII 17930 (ON SCDC), 80 O.R. (3d) 689 at paras. 42-47, the Divisional Court confirmed that where "the literal and ordinary meaning of the Release is that the parties' intention was to make a full and final release of all claims", "Courts will be slow to set aside a release and settlement made between the parties for valuable consideration." The Court also noted that it is well-settled law that parties must be held to their agreements except where there is impropriety, or unconscionability in the settlement or its terms.

26In the present case, there does not appear to be any dispute that the literal and ordinary meaning of the release demonstrates an intention on the part of the parties to have the applicant release the respondent from claims under the Code. Giving legal effect to the plain and ordinary meaning of the release, the applicant is prevented from pursuing her Application to the Tribunal, unless there is some basis upon which it should be set aside. The applicant raises duress and misrepresentation on the part of the respondent as reasons why the release should be set aside.

Duress

27With respect to duress, the applicant submitted at the preliminary hearing that she was under economic duress, and duress with respect to the short time frame she had to execute the release. The applicant submitted that there was no indication that anything would happen, other than if she signed the release.

28"Duress" has been defined as involving "a threat of harm made to compel a person to do something against his or her will or judgment..." See Black's Law Dictionary, 8th ed. (St. Paul, MN: Thomson West, 1999). "Economic duress" is also specifically defined in Black's Law Dictionary as "... an unlawful coercion to perform by threatening financial injury at a time when one cannot exercise free will."

29The applicant testified that she was really upset and "a mess", and had no money to hire or consult a lawyer. She also referred to having daughters in university and tuition due the next month. The applicant submitted, among other things, that she was in a precarious financial situation and felt she had no choice but to sign the release.

30I accept that, at the time her employment was terminated, the applicant was upset and had financial pressure. However, the case law is clear that economic pressure alone is not sufficient to set aside a release: see Sinnett v. Orlick Industries, supra, at para. 24. The Tribunal, in Kailani v. Securitas Canada, 2009 HRTO 1183 at para. 35, held that the test for economic duress is high:

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 the termination of employment could be violated.

31The applicant also submitted in her materials that she was led to believe that if she did not sign the release no termination or severance payments would be made, and that the threat of withholding entitlements, statutory or otherwise, constitutes economic duress. I also understand the applicant to have submitted that she was under duress in terms of the time frame she was given to sign the documents, and with respect to her benefits being terminated on the day her employment was terminated and the respondent's proposal to provide her with an unspecified amount in lieu of benefits.

32First of all, there is no evidence before me that the applicant was told by anyone, or that anything was said to her that would imply, that she would not be paid what she was entitled to under the ESA if she did not sign the release. The applicant's termination of employment letter refers to the respondent's obligations to the applicant under the ESA. The letter also clearly asks that the applicant sign and return the letter and release confirming her acceptance of the terms and conditions therein, so that "any money exceeding the statutory requirement" can be released to her.

33I also understand that the applicant was concerned about benefits as she needed medication. While the termination of employment letter did not specify how much the respondent proposed to provide her in lieu of benefits, the respondent clearly proposed a total amount that was in excess of her annual salary. It also appears from the evidence of both the applicant and Mr. Rehoric that the applicant spoke to Mr. Rehoric sometime before signing the release and asked that her benefits be extended for a month, and he simply agreed to what she requested.

34In addition, while the applicant submitted that she was given very limited time to sign and return the documents, she signed the release on July 4, 2016, well before the July 8, 2016 date by which the respondent had asked her to return the documents. There is no evidence that the applicant asked for more time, although she spoke to Mr. Rehoric and requested other things. She also did not provide any evidence that she needed more time, or that she felt pressured in any way by the amount of time within which the respondent asked her to return the signed documents. I also have no reason to doubt Mr. Rehoric's evidence that the respondent would have given the applicant more time to consider the documents, had she requested more time.

35In the circumstances, I do not find that there was any impropriety on the part of the respondent regarding the time within which the applicant was asked to return the signed letter and release, or that the applicant was coerced by any threat of financial harm or injury into signing the letter and release. I am not satisfied therefore that the applicant was compelled to sign the release under any economic duress, and/or any duress related to the time she was given to sign the documents.

36In addition to her submissions regarding economic duress, and the time she was given to sign the documents, the applicant submitted, among other things, that she was upset and "a mess" when her employment was terminated. I also understand from the applicant's evidence that she had arthritis at the time her employment was terminated, but I do not understand the applicant to be arguing that she was under any mental or physical duress at the time she signed the release. In any event, I do not find that the applicant was under any other pressures to such a degree that she was coerced or compelled under duress to sign the release. There is also no indication that the applicant had an illness or disability that prevented her from understanding the termination of employment letter and release. In the circumstances, I am also not satisfied that the applicant signed the release under any mental or physical duress, or that she was subject to any combination of factors giving rise to any such duress.

Misrepresentation

37With respect to misrepresentation, the applicant submitted at the preliminary hearing that she was told by the respondent that her employment was being terminated for business reasons, and she was led to believe that the respondent was terminating the employment of many others, but the bulk of the terminations did not occur until eight months later. The applicant submitted that, had she known she was the only one terminated for business reasons, she would have been able to argue that the termination of her employment was discriminatory based on both her age and her medical situation.

38Where one party to an agreement deliberately misleads another party and thereby induces him or her into entering an agreement, the agreement may be set aside on the basis of the fraudulent misrepresentation. In Wedderburn v. Air Liquide Canada, 2010 HRTO 691, and Luo v. Dell Canada, 2010 HRTO 879, the Tribunal relied upon the Ontario Court of Appeal's decision in 1018429 Ontario Inc. v. Fea Investments Ltd., 1999 CanLII 1741 (ON CA), 179 D.L.R. (4th) 268 at para. 51, in which the Court cited as authoritative Professor Fridman's description of fraudulent misrepresentation in The Law of Contract, 3rd ed. (1994) at p. 294:

A fraudulent misrepresentation is one which is made with knowledge that it is untrue and with the intent to deceive. It may even constitute a term of the contract. Whether it does or not is immaterial, since fraud gives rise to effects in the law of contract and the law of tort. A contract resulting from a fraudulent misrepresentation may be avoided by the victim of the fraud. In such instances the apparent consent by the innocent party to the contract and its terms, is not a real consent. Whether or not the effect of such fraud is to induce a mistake (which might render the contract void), the consent of the innocent party may be revoked at his option.

39In O'Regan v. Firestone Textiles, 2010 HRTO 502, the Tribunal held that it is well-established at common law that in certain limited circumstances, a false representation can have the effect of invalidating a signed legal document. See Corfax Benefit Systems Ltd. v. Fiducie Desjardins Inc., (1997) 37 O.R. (3d) 50, 1997 CanLII 12195. The Tribunal stated, however, that there are certain elements that must be proven in order to establish this result, including that the representations were made by the respondent, that they were false in fact, that they were known or should have been known to be false, and that they induced the applicant to enter into the agreement to her prejudice. The Tribunal also noted that there is a fifth required element, which is that within a reasonable time after discovery of the falsity, the applicant elected to void the agreement and accordingly repudiated it.

40In the present case, the applicant argues that at the time her employment was terminated, she was under the belief that there were a number of layoffs that were happening and that she was not the only individual whose employment was being terminated. She submits that it was on this basis that she was led to believe that the termination of her employment was not for discriminatory reasons, and it was under this belief that she executed the release. With respect to what the respondent communicated to her, the applicant testified that she was told that they had to let her go because of a business decision, that she was just the first of many to be terminated and that 12 months is pretty good.

41It appears from the uncontradicted evidence of Mr. Rehoric that there was a plan to reduce the staff in the applicant's department in Canada from seven to four, which included a reduction of two of three senior analyst positions, as part of shared services, which started around 2013. He testified that it was known throughout the company, on an ongoing basis in 2013 and 2014, that a lot of administrative duties would be moved to shared services.

42In cross-examination, Mr. Rehoric explained that in payroll in Canada the employment of one individual was terminated in 2011, which was not part of shared services but allowed the respondent to terminate fewer people later. The employment of a second individual was terminated in July 2013, as part of shared services. The applicant was next, after which there was a retirement six months later.

43Mr. Rehoric testified in cross-examination that, after the applicant's employment was terminated, the employment of many salaried employees was terminated. He also testified that there were quite a few in 2013 and 2014 and the respondent reduced a hundred positions over the last three or four years, through terminations, resignations and retirements.

44Mr. Rehoric also testified that in 2011 the respondent had approximately 1400 employees across Canada and was looking to operate more efficiently. He testified that the respondent had about 550 employees in Canada as of December 2015, and that the total workforce in Canada was expected to drop to about 100 employees in 2016. The applicant also testified that there was a pretty large termination about eight or nine months after she left.

45Considering all of the evidence, I am not satisfied that if the applicant was told by the respondent when her employment was terminated that they had to let her go because of a business decision, and that she was just the first of many to be terminated, that these were false representations, or representations that were known or should have been known to be false. It appears that the respondent has had an ongoing reduction in staff in recent years, that has continued after the applicant's employment was terminated.

46I also have some difficulty with the applicant's assertion that, at the time her employment was terminated, she was led to believe that the termination of her employment was not for discriminatory reasons, and it was under this belief that she executed the release. The applicant testified that another individual she worked with had her employment terminated about a year before her, and she was on disability prior to her termination. The applicant also gave evidence concerning the respondent's knowledge of her medical conditions prior to the termination of her employment. In addition, although the applicant asserts that she was led to believe that the termination of her employment was not for discriminatory reasons, she also submits in her materials that she was of the further belief at the time her employment was terminated that the discriminatory reasons for the termination of her employment would be difficult to prove given the purported other terminations. The applicant submits that, after signing the release, she learned that no other employees were laid off until eight months later. She submits that, had she had that information when she signed the release, she would have believed that she would have had a greater likelihood of success in her human rights complaint related to the termination of her employment. In the circumstances, I am not satisfied that the respondent made any false representations to the applicant that induced her to enter into an agreement to her prejudice.

47There is also no evidence that the applicant has ever elected to void or repudiate the agreement, which would have required her to return the settlement monies that she received from the respondent.

48Having carefully considered the parties' evidence and submissions, I am not satisfied that there was any misrepresentation that would warrant setting aside the release signed by the applicant.

Conclusion

49In the circumstances of this case, to proceed with the Application in the face of the release signed by the applicant would be an abuse of the Tribunal's process. Based on the clear and unambiguous language in the release, the applicant released the respondent from claims under the Code. Based on the evidence and submissions before me, there is no basis upon which find that the applicant ought not to be bound by the release.

Order

50The Application is dismissed.