Whether in the context of an escaped monkey being apprehended by animal control officials or  a termination of employment, the circumstances surrounding the signing of a release can make or break that release if challenged.

An animal services officer testified Monday that Nakhuda voluntarily signed a form surrendering her ownership of Darwin. But she has said that she thought that by signing the form she was temporarily surrendering Darwin so public health tests could be conducted on him.

The Globe and Mail, Monday, June 10, 2013

Ms. Nakhuda admitted that she did sign the release, but disputed the circumstances surrounding her signature.

A recent adjudication from Human Rights Tribunal of Ontario is a reminder of how important releases are when the employment relationship breaks down and the parties settle the issues with an agreement including a release. In Petru Bujdula and Konica Minolta Business Solutions (Canada) Ltd. 2013 HRTO 987 (CanLII), the applicant, Petru Bujdula, was terminated by Konica Minolta on October 4, 2012.  Mr. Bujdula was provided with a written settlement offer that  would provide him with his statutory entitlement as well as additional compensation in exchange for his signature on a release.  The offer advised the applicant he had seven days to consider the offer.  The employee signed the release right there on the spot.  The release said:

I, Petru (Peter) Bujdula…. do hereby release and forever discharge the Releasee (Konica)  of and from all manner of actions, causes of actions, suits, debts, dues, accounts, bonds, covenants, contracts, claims and demands whatsoever which against the said Releasee the Releasor (Bujdula) ever had, now has or can, shall or may hereafter have …. including… any and all claims under the Ontario Human Rights Code, as amended.

IN SIGNING THIS RELEASE, I acknowledge that I have been given sufficient time to consider my actions and to seek such independent legal or other advice, as I deem appropriate. I further acknowledge that no representation of fact or opinion, threat or inducement has been made or given by the Releasee to induce the signing of this Release.

In brief, the release discharged Konica Minolta from essentially any action or demand including any claims under the Ontario Human Rights Code and acknowledged that he had time to seek independent legal advice, had been given no advice by the employer and had not been threatened or induced to sign the release.

What happened next?

About three weeks later Mr. Bujdula filed a complaint with the Ontario Human Rights Commission arguing that he should not be bound by the release because the employer had a legal obligation to explain the terms of the release to him and failed to do so.

The adjudicator disagreed.

The adjudicator agreed with the employer that the doctrine of abuse of process was a relevant consideration and that signing a release and then filing a complaint could constitute an abuse of the Tribunal’s process unless there was “some compelling” reason to set it aside.  In this matter, there was nothing compelling.  The adjudicator noted that:

  • The employer had provided the employee with seven days to consider the offer – including the release – and to obtain legal advice.
  • The employee acknowledged that he had been given this time to consider the matter when he signed the release.
  • The fact that the employee chose NOT to obtain independent legal advice did not transfer the obligation to provide legal advice to the employer and, in fact, the employer would have been in a conflict of interest if it had provided such advice.

The Employee also argued that the release was discriminatory because the employer used it to “wash its hands” of him and because he did not know where to get legal advice.  The adjudicator dismissed this saying:

[14]        The applicant argues further that the release was discriminatory because it was used in a protective way by the respondent to wash its hands of the applicant. The applicant is correct that a release is used to protect employers from further liability. That on its own does not make the use of a release discriminatory. The applicant also asserts the release was discriminatory because he did not know where to get legal advice. The respondent argues there are many ways to obtain legal advice or lawyer referrals including from the Law Society of Upper Canada and from the Human Rights Legal Support Centre. There is no evidence that the applicant made any attempt to obtain legal advice. In any event, the fact that the applicant did not know where to get legal advice does not make that term of the release discriminatory

Instead of being discriminatory, the adjudicator recognized that Mr. Bujdula had been given time to get legal advice and even if he didn’t know where to get legal advice at the time he signed the release, this did not make the release discriminatory.

What does this mean for employers?

Releases, if properly drafted and executed can include all complaints arising prior to the date of termination and can constitute a binding contract that will prevent future litigation of settled matters unless there are compelling reasons to set them aside.  What are compelling circumstances?  They can include threats and coercion or something that is contrary to public policy.  The takeaway from this case?  Always build in a reasonable period of time during which the employee can seek independent legal advice.