P-2010-0028, P-2010-0544

IN THE MATTER OF AN ARBITRATION

Under

THE PUBLIC SERVICE ACT

Before

THE PUBLIC SERVICE GRIEVANCE BOARD

BETWEEN

Timothy Bingham

Applicant

• and -

The Crown in Right of Ontario (Ministry of Government Services)

Employer

BEFORE

Kathleen O’Neil

Vice-Chair

FOR THE GRIEVOR

Timothy Bingham, on his own behalf

FOR THE EMPLOYER

Cathy Phan Ministry of Government Services Labour Practice Group Counsel

CONFERENCE CALL WRITTEN SUBMISSIONS

September 9, 2010. Completed November 2, 2010.

DECISION

1This decision deals with a motion by the applicant Mr. Bingham to the effect that the settlement of a grievance that he entered into on June 18, 2010 with the employer has not been complied with, and in any event contains illegal and therefore unenforceable elements. The employer asks the board to uphold the settlement.

Factual/procedural background

2Mr. Bingham, the applicant, was employed as an Employee Relations Advisor when he filed an application with the Board, which came on for mediation on June 18, 2010. At the time of the mediation, the grievor had raised a number of issues by way of grievances, one related to his unsuccessful application for a Junior Counsel position, another claiming reimbursement for fees charged him by the Law Society of Upper Canada. Later allegations alleged that certain directions from the employer constituted an attempt to interfere with his efforts to enforce his rights. On the date set for mediation, the parties signed a detailed Memorandum of Settlement, which settled three grievances, a Human Rights application and various other complaints that were outstanding between the parties, including a complaint under the employer's Workplace Discrimination and Harassment Prevention policy (WDHP). The Memorandum of Settlement, by its own terms, was confidential, and the reasons which follow attempt to maintain that to the extent possible.

3One of the terms that it is necessary to disclose in order to resolve this dispute is that the parties agreed "to a full and final separation of employment" on terms, including valuable consideration. Others that are necessary to this decision are paragraphs 1, 4, 6 and 13 of the settlement document, which read as follows:

1. The Complainant agrees irrevocably that his employment with the employer fully, completely and unconditionally ceases and terminates effective June 21, 2010.

2. The parties agree that the complainant shall have no additional claim for payment of salary, benefits, severance pay, termination pay or payments of any other kind arising from his employment with the Employer.

3. The employer agrees that the ROE [Record of Employment] issued by the Employer will be consistent with this Memorandum of Settlement.

4. This Memorandum Of Settlement constitutes full and final settlement of any and all claims, complaints, grievances, differences, or actions whatsoever that the complainant has or may have against the Employer its representatives, present and past employees, office holders, directors and servants, and officials whether under a collective agreement, statute, regulation, policy, contract or at law as a result of or arising out of the Complainant’s employment by the Employer or the termination of that employment, including but not limited to the Employment Standards Act, the Ombudsman Act, the Workplace Discrimination And Harassment Prevention Policy and the Human Rights Code. The complainant hereby forever releases the Employer, its representatives, present employees and officials from all such claims, complaints, grievances and actions.

4About two months after the settlement, on August 26, 2010, Mr. Bingham requested a hearing with regards to the implementation of the settlement. He specified two issues: the failure to provide a Record of Employment which was undermining his ability to receive Employment Insurance; and the failure to provide 16-weeks termination payments as per Regulation 288/01, of the Employment Standards Act.

5A teleconference was held on September 9, 2010 in response to the issues raised by Mr. Bingham. The Board was advised by employer counsel during the conference call that the Record of Employment had been sent to Mr. Bingham the day before. During the teleconference, Mr. Bingham indicated he might want to call witnesses as to the employer's intention in negotiating the settlement with him. Further, he argued that the agreement provided less than what he was entitled to under The Employment Standards Act because it was silent on severance pay. Since the agreement had no explicit reference to his entitlement to severance pay, in his view, it could not be said to be unambiguous. Mr. Bingham indicated he also might have further arguments to make. The Board invited written submissions in this regard.

6Mr. Bingham made written submissions asking for a hearing in which he would call viva voce evidence. Specifically, he proposed to call the Deputy Minister of the Ministry of Government Services to give evidence about the government's service standards in light of the fact that his Record of Employment had not been supplied within the five days required by statute. He also wished the Deputy Minister to give evidence on the employer's position which he characterized as saying that it could contract out of the minimum requirements of The Employment Standards Act, and as to whether delegations of authority in the public service cover unlawful conduct. He also proposed to call the Deputy Minister of Finance to explain what he termed the position of the government that it can structure settlements such that wages are paid as damages to avoid statutory deductions. He further submitted that it might be necessary to give the Canada Revenue Agency notice of the hearing or to subpoena a representative of the CRA to provide testimony. Mr. Bingham submitted that it was critical that the Board review the employer's understanding of its obligation to respect statutory requirements and that such a review should include senior government officials to determine to what extent what he characterized as a misunderstanding or lack of awareness of the law had permeated the public service and become part of regularized practices.

7The employer’s submissions were to the effect that the agreement was clear on its face and there was no justification for extrinsic evidence as the dispute between the parties related entirely to the interpretation of that clear language. Employer counsel noted that the witnesses Mr. Bingham proposed to call had not been involved in the negotiation of the settlement, questioning how they could be useful in determining the intention of the parties.

8The board reviewed the parties’ submissions and determined that the settlement agreement was clear and unambiguous. In this regard, Mr. Bingham did not establish any ambiguity in the wording of the settlement agreement. Indeed in his reply submissions, he explicitly agreed with the employer’s submission that the plain wording of the agreement should cover the interpretation of its intention and that there was no need for extrinsic evidence for that purpose. In light of the parol evidence rule, which requires that the intention of the parties to an unambiguous agreement must be derived from the plain meaning of the written words rather than from extrinsic evidence, the Board concluded that oral evidence was not warranted. Further, it was the board's view that the witnesses proposed were not in a position to assist the board in interpreting the unambiguous agreement and that the issue dividing the parties was a matter of the interpretation of the agreement signed, which did not require oral evidence as proposed.

9The parties were notified that extrinsic evidence would not be required to resolve the dispute as to the meaning of the agreement. The Board then directed that the remaining issues be dealt with by further written submissions, which were completed by November 2, 2010.

Summary of Positions of the Parties

10Mr. Bingham argues that he is entitled to statutory severance pay flowing from his layoff from employment with the government, pay in lieu of notice according to the standards of reasonable notice, and aggravated and punitive damages. Essentially he argues that, to the extent that the settlement does not provide statutory severance pay, it is an illegal attempt to contract out of his statutory entitlements.

11Mr. Bingham submits that the way for the board to uphold the agreement as well as enforce his statutory entitlements is to treat the agreement as only covering the claims in the enumerated complaints to the Public Service Grievance Board and applications to the Human Rights Tribunal and for expenses, and not his statutory entitlements. Mr. Bingham argues that the case law supports the concept that in order to be considered sufficient to satisfy his rights to notice or statutory termination and severance pay, an agreement must unequivocally and explicitly treat the compensation as covering these items. Since the terms of the agreement do not do so, Mr. Bingham argues that reasonable notice is owing in line with the factors enunciated in Bardal v. Globe & Mail Ltd. (1960), 1960 CanLII 294 (ON HCJ), 24 D.L.R. (2d) 140 (Ont. H.C.) and affirmed in Machtinger v. HOJ Industries Ltd., 1992 CanLII 102 (SCC), [1992] 1 S.C.R. 986 (SCC), Dunsmuir v. New Brunswick, 2008 SCC 9, [2008] 1 S.C.R. 190 (SCC) and Honda v. Keays, 2008 SCC 39, [2008] 2 S.C.R. 362 (S.C.C.). In this regard, Mr. Bingham submits that the fact that he was terminated without cause from a secure civil service job should lead to a longer notice period, and he asks for 12 months pay in this regard. As well he asks for aggravated damages for the manner in which he was dismissed, which includes illegality in not giving him a record of employment in the prescribed time-frame which he asserts affected his right to receive Employment Insurance.

12Mr. Bingham asserts that the release clause in paragraph 13 of the settlement cannot cover the statutory entitlement under the Employment Standards Act flowing from the layoff effected by the settlement in that it is limited to a withdrawal of the applications and not any entitlements that flow from the layoff, and that the monetary compensation is not sufficient to satisfy the statutory minima on termination of employment.

13Mr. Bingham's argument acknowledges that the settlement includes a full and final separation of employment. However, noting that the nature of the separation is not explicitly articulated, he takes the position that the Board should characterize it as a termination without cause. He submits that the termination of employment was in the control of the employer as evidenced by a number of the terms of the settlement and supported by the employer's own actions and its characterization of the separation as a lay-off in issuing the Record of Employment. For instance, Mr. Bingham notes that the settlement designated a certain time period as working notice of termination. Mr. Bingham argues that such notice is provided when the employer determines that the employment relationship is at an end as per the Employment Standard Act, 2000. Further, Mr. Bingham submits that his agreement not to apply for another position in the Ministry of Government Services as one of the terms of settlement is inconsistent with a resignation from employment. As well, he notes that the Public Service of Ontario Act requires a resignation to be in writing and that there is no language in the agreement to suggest that the termination is a resignation.

14Given that the language of the agreement indicates that the monetary consideration relates to the release of the claims and complaints and that there is no mention of severance or termination payments or common law notice in the paragraphs providing for monetary payments, Mr. Bingham argues that it is clear that he has not received termination pay or pay in lieu of notice. He asserts that where an employee is laid off, the employer is required to provide severance and termination payments including but not limited to 16 weeks notice or pay in lieu under the Employment Standards Act, noting that neither the employer nor the employee can contract out of or waive the requirements or rights flowing from the Employment Standards Act.

15Further, Mr. Bingham submits that the employer is also required to provide additional compensation for laid-off employees under directives created under the auspices of the Public Service of Ontario Act. Mr. Bingham also asserts that the agreement could not be considered to provide a greater benefit than what is provided under the Employment Standards Act as the provisions of the agreement do not “directly relate” to the same subject matter as the employment standard, as discussed in SIGPROWireless Inc. v. Peter Noel and Director of Employment Standards, 2004 CanLII 47231 (ON L.R.B.).

16Mr. Bingham argues that there are areas in which the employer has breached statutory requirements. Firstly, the Record of Employment which the employer agreed to provide was not provided to him or the federal government within 5 days of the termination of employment as required by regulations under the Employment Insurance Act. Rather, Mr. Bingham states that it took more than 70 days to reach the federal government and that he has yet to receive his copy. Further, Mr. Bingham argues that the portion of the settlement in which he agreed to indemnify and save harmless the employer from and against all claims and demands under the Employment Insurance Act constitutes an impermissible waiver of statutory rights. In order to be made whole, Mr. Bingham asks that the termination of employment should be considered to have occurred five days before the provision of the Record of Employment and the employer should have to pay the difference in time in wages. As well he argues that the characterization of the amounts paid to him as damages amounts to a breach of the requirements to make statutory deductions from wage payments, and that is impossible to know with any certainty what sums are for what purpose. Referring to Charlton v. Ontario (Community Safety and Correctional Services), 2007 CanLII 24192 (ON P.S.G.B.), Mr. Bingham argues that the Board should enforce the statutory provisions at play here as implied terms of his employment contract.

17In the alternative, Mr. Bingham asks that the settlement be declared unlawful and void ab initio, as the law is well-established that an illegal contract is unenforceable.

18In addition to the cases cited above, Mr. Bingham relies on the following case law to support his arguments: Assurant Group v. Ignacia Menor Fillion and Director of Employment Standards, 2004 CanLII 5721 (ON L.R.B.), concerning what constitutes a greater right or benefit under the Employment Standards Act and that severance pay is distinct from pay in lieu of notice; Ontario Northland Transportation Commission v. Transportation Communications International Union, 1992 CanLII 4696 (ON P.E.H.T.) concerning the inability to contract out of pay equity and other statutory protections; and Wallace v. United Grain Growers Ltd., 1997 CanLII 332 (SCC), [1997] 3 S.C.R. 701 concerning the circumstances where aggravated and punitive damages may be awarded.

19By contrast, the employer contends that the settlement was intended to cover off everything and constitutes an enforceable agreement that there would be no additional claims including any for termination pay or pay in lieu of notice. Noting that Mr. Bingham was working as a labour relations professional, the employer asserts that he should be considered a sophisticated party and that his attempts to alter the terms of the agreement should be rejected. The employer cites Bucyrus Blades of Canada Limited v. McKinley [2005] O. J. No. I31 and Bartlett v. Canada life Assurance Company [1998] O. J. No. 269 in support of its submission that the jurisprudence is clear to the effect that employers and employees are entitled to settle in the manner that they did in this case. Further, the employer takes the position that the settlement does not specify anything about the time frame in which the Record of Employment must be delivered, and that since it was sent electronically, a copy is not required to be sent to the employee.

Disposition

20Having carefully considered the parties’ arguments, I find that I am not able to grant Mr. Bingham's requests in that he has released the employer from all such claims by the clear terms of paragraphs 4 and 13, set out above. I agree with the employer that the Bucyrus Blades decision, cited above, is good authority for the proposition that the parties are entitled to do exactly what they did in signing the memorandum of settlement here in issue, which is to make a settlement of all of their rights and obligations on termination of the employment relationship. Indeed, the incentive to resolve such litigation would be very greatly reduced if it were not possible to do so, so that the parties were continually open to claims from each other. Mr. Bingham and the employer agreed, in clear language, to go their separate ways on terms which are unambiguous and clearly set out in writing. It is fundamental to the law of contract that the intentions of the parties, gathered from the words they have used, will be given effect. I find nothing illegal or contrary to statute in the parties’ mutual covenants, including the full and final release of all further entitlements Mr. Bingham gave to the employer. The purpose of the settlement was to arrive at a clean slate where both parties could know that the issues flowing from the employment relationship were resolved. Mr. Bingham could have insisted on terms different than those agreed to, or continued on with the complaints and applications he had filed. However, having decided to sign the agreement as it stands, it is not for the Board to assist him in altering its provisions. As a matter of contract I find that the settlement is enforceable. Further, as a matter of policy, it is very important that agreements made to resolve issues and avoid litigation be upheld, unless there are very exceptional circumstances, such as duress, unconscionability, or illegality, for which there is no evidence here. Nor is there any issue of absurdity or a result which is incompatible with the intentions of the parties flowing from the application of the agreed terms.

21The general thrust of Mr. Bingham’s argument is that the separation of employment he negotiated at mediation should now be treated as a termination without cause and that the settlement should be considered to relate only to the grievances filed, leaving his statutory and common law entitlements outstanding. The basic problem with that argument is that it is not an interpretation that flows from the plain meaning of the words used in the settlement agreement, read as a whole. Mr. Bingham and the employer did not see fit to characterize the separation of employment more extensively than they did, and I am not persuaded that the Board should impose the characterizations urged by Mr. Bingham, or the increase in the consideration flowing from the negotiated separation from employment for which he argues.

22Nor do I find any illegality or problem with enforceability in the nature of the clear wording allocating the compensation to satisfaction of his various outstanding claims and grievances. As Mr. Bingham noted in his argument, he had suffered no lost wages at the time of the settlement. In these circumstances, no assumption or inference should be made to the effect that somehow the agreement that the compensation paid was for damages and expenses flowing from claims and applications he had made prior to the settlement was an attempt to circumvent statutory requirements concerning deductions from money paid as wages. Further, as noted in the Board’s decision in Antoncic v. Ontario (Community Safety and Correctional Services) P-2007-0665, 2009 CanLII 15649 (ON P.S.G.B.), it is not at all unusual, or unenforceable, for parties to a settlement to resolve issues going beyond the specific dispute which would have been litigated if the settlement had not occurred. In sum, I find no merit in Mr. Bingham's argument that the release clause only covers claims and grievances made prior to his separation from employment. In these circumstances, it is not necessary or appropriate to engage in an analysis of the relationship between the consideration agreed to and what Mr. Bingham would have been entitled to, under statute or at common law, had he been terminated without cause.

23As to Mr. Bingham's allegations about the statutory requirement that Records of Employment be provided within five days of termination, in my view the employer’s delay in this regard is not a breach of the terms of settlement signed by the parties, as no time for delivery of the Record of Employment was specified. He does not dispute that the Record of Employment was issued consistent with the settlement, which is the extent of the agreement in this respect. I have also considered the related argument made by Mr. Bingham to the effect that the statutory requirements concerning the Record of Employment, as well as other matters, were enforceable as implied provisions of his former contract of employment. In this respect, the Board notes that the parties agreed that the Board should retain jurisdiction to deal with the interpretation and enforcement of the settlement. It is my view that this limited retained jurisdiction does not extend to the litigation of issues of interpretation of the contract of employment. The settlement agreement ended that contract of employment, and seized the Board with the interpretation of the settlement, rather than the contract of employment itself, which would have been the focus if the grievances filed had not been settled. In regards to Mr. Bingham's reliance on the board's decision in Charlton, cited above, for the proposition, with which I agree, that the board does imply statutory provisions into contracts of employment, that decision is not of assistance here, as it does not deal with a circumstance similar to the one in question, involving only the interpretation and enforcement of a settlement agreement.

24I have carefully reviewed the other authorities referred to by Mr. Bingham as well, and find that they do not address the issue at hand, which is whether Mr. Bingham has a right to claim compensation beyond that provided in the settlement he signed. The cases on which he relies are distinguishable from the situation at issue here. Quite apart from the enforceability of the terms of the agreement discussed above, which is sufficient to dispose of this matter, the factual circumstances here are very different from those in which the Courts have enforced statutory minima in the face of attempts to contract out of them, or implied terms of reasonable notice into a contract of employment when an employee has been fired and not paid the statutory minimum. Most basically, unlike the fact situations in most of the cases on which he relies, Mr. Bingham had not been fired at the time he signed the settlement agreement. Rather, he agreed to leave his employment, rather than being unilaterally terminated. Moreover, although there were several issues outstanding between him and his employer at the time of the settlement, there was no suggestion that the employer had taken any action to terminate his employment at the time he appeared at the Board to engage in mediation of a grievance related to a job competition. He was free to agree to leave his employment on the terms that he did, or not, but having done so, he has no entitlements beyond those provided in the agreement he signed.

25The board continues to remain seized to deal with any further issues surrounding the interpretation or enforcement of the settlement, which the parties are unable to resolve themselves.