EMPLOYERS – Make sure you take care in your release form for the dismissed employee to sign.
The new case: Hutton v. ARC Business Solutions Inc., 2015 AHRC 7 (Alberta Human Rights Tribunal).
The employer paid a severance package in exchange for a release of liability being signed. The release form did not specifically address a human rights complaint by the employee. The employee received the severance package, but then brought an application against the employer for more damages. The employee was successful – the employer’s release did not prevent the employee from suing for more.
The Tribunal considered these factors:
- The explicit or implicit language of the release;
- Whether there was an inequality of bargaining power between the parties;
- Whether there was undue influence or coercion;
- Whether the terminated employee obtained independent legal advice;
- Whether the release was signed under duress;
- Whether the employee knew of their right to file a human rights complaint, and whether the employer knew that a potential human rights complaint was contemplated; and
- Other considerations such as lack of capacity to enter into an agreement, the timing of the complaint, mutual mistake, fraud, forgery, etc.
1. Be very specific in the release form.
2. Remember to keep in mind the presumed power imbalance between you and the employee when a severance is agreed to for a termination.
3. Ask your qualified employer to review your release form before you present it to the employee.
This WARDS PC BLAWG is for general information only. It is not legal advice, or intended to be. Specific or more information may be necessary before advice could be provided for your circumstances.