HUMAN RIGHTS TRIBUNALS OF ALBERTA

Transcription

1 HUMAN RIGHTS TRIBUNALS OF ALBERTA Citation: Hutton v. ARC Business Solutions Inc., 2015 AHRC 7 BETWEEN: Kristen Hutton Complainant - and - ARC Business Solutions Inc. Respondent PRELIMINARY MATTERS DECISION SEVERANCE AGREEMENT Tribunal Chair: Joanne Archibald, B.A., LL.B. Decision Date: April 7, 2015 File Number: N2014/06/0077 Alberta Human Rights Commission 7 th Floor, Commerce Place Street Edmonton, AB T5J 4L4 Phone Fax

2 Introduction [1] Ms. Kristen Hutton, the complainant, was an employee of the respondent, ARC Business Solutions Inc. (ARC). After her termination from employment with ARC, she filed a human rights complaint with the Alberta Human Rights Commission (the Commission). The question before the Alberta Human Rights Tribunal (the Tribunal) on this preliminary application is whether the terms of the Employee Termination Notice signed by Ms. Hutton and ARC on May 22, 2014 constitute a valid and enforceable settlement of allegations of human rights discrimination arising from Ms. Hutton s employment. If so, it would oust the Commission s authority over the complaint. [2] A teleconference was convened with the parties on January 28, At that time, and with the consent of the parties, it was agreed that an oral hearing was not necessary and the parties would prepare written submissions on the issue of the validity and enforceability of the Employee Termination Notice. These submissions would specifically address whether the Employee Termination Notice released or waived Ms. Hutton s right to make a human rights complaint to the Commission arising from circumstances surrounding her employment or termination. [3] For the reasons that follow, I find that the Employee Termination Notice does not extend to Ms. Hutton s statutory right to file a complaint with the Commission or the authority of the Commission over any alleged human rights violation that may have occurred between the parties. The Employee Termination Notice [4] For clarity, I have included below the entire text of the Employee Termination Notice: This notice is to inform you that ARC is terminating your employment effective May 22, ARC is offering you: 1. Two (2) week Severance Pay, which includes the statutory one (1) week severance required under the Alberta Employment Standards Code for your length of service, and This offer is based on the following conditions: 1. Return of all ARC property to ARC s Edmonton office including Key, elevator Card and any other ARC property in your possession on or before May 26, 2014; and 2. Acceptance of this Offer on or before May 23, 2014 as the full and final settlement of any and all claims for compensation with respect to the termination of your employment between ARC and yourself. 2

3 If you choose not to sign and return this Notice as mentioned, it will be deemed withdrawn and ARC will pay you the 1 week severance pay required by the Alberta Employment Standards Code. Your termination will remain effective as stated. Also you must in any event return all ARC property on or before May 26, 2014 or this Offer will be null and void. Upon your return of this notice, with your signed Acceptance in the space below, and return of ARC s property, ARC will pay you the agreed Severance Pay within 5 business days. [5] As noted above, the Employee Termination Notice was signed by the parties on May 22, Analysis [6] The leading Alberta case addressing the validity and enforceability of severance agreements in human rights complaints is Chow v. Mobil Oil Canada. 1 In Chow, Justice Rooke sets out the following list of considerations for evaluating the validity and enforceability of settlement agreements: 2 1. The actual language of the release itself as to what is included, explicitly or implicitly. 2. Unconscionability, which exists where there is an inequality of bargaining power and a substantially unfair settlement: Lloyds Bank v. Bundy, [1975] 1 Q.B. 326; and Blackmore v. Cablenet Ltd. (1994), 8 C.C.C. (2d) 174. This does not, however, allow a tribunal to interfere with a settlement where it finds inadequacy of consideration: Gissing. 3. Undue Influence which may arise where the complainant seeks to attack the sufficiency of consent: Yui-Ming Sui. A plea of this nature will be made out where there has been an improper use by one party to a contract of any kind of coercion, oppression, abuse of power or authority, or compulsion in order to make the other party consent. 4. The existence or absence of independent legal advice may also be considered: Yui-Ming Sui; and Adamson. However, if a party has received unreliable legal advice that may not affect the settlement: Robertson v. Walwyn. 5. The existence of duress (not mere stress or unhappiness), and subissues of timing, financial need, and the like may also be factors: Heys, Adamson, D. & C. Builders, and Gregov). 1 Chow v. Mobil Oil Canada, 1999 ABQB Chow, supra at para

4 6. The knowledge on the party executing the release as to their rights under the Act, and, possibly, the knowledge on the party receiving the release that a potential complaint under the Act is contemplated. 7. Other considerations may include lack of capacity, timing of the complaint, mutual mistake, forgery, fraud, etc. [7] In their respective submissions, the parties each addressed a number of these considerations. The first question which arises is the ambit of the settlement agreement and whether the terms include, either directly or through broader wording, settlement of any human rights violation arising from Ms. Hutton s employment. The wording of paragraph 2 and specifically the meaning of the phrase full and final settlement of any and all claims for compensation with respect to the termination must be carefully examined. ARC submits that the language is clear and unambiguous and that by accepting the offer and subsequent payment it is clear that Ms. Hutton was releasing Arc from any claim for compensation related to the termination of her employment, including a claim for compensation for termination resulting from alleged discrimination. [8] The words of an agreement must take their meaning from their context. While ARC urges that compensation includes matters such as damages arising from a human rights complaint, I find that this is an unnatural meaning to attribute to the word in the context of the termination of an employer-employee relationship. In common parlance, compensation arising from employment extends to wages or salary and benefits. On the face of the agreement, Ms. Hutton received two weeks wages to compensate her for termination from employment with ARC without prior notice. According to the terms of the agreement, the calculation of the severance payment was made by reference to ARC s statutory obligation under the Alberta Employment Standards Code. 3 From the context, this must necessarily be a reference to an employer's obligations under Division 8 of the Code which provides for notice of termination and payment in lieu of notice. It was, as Division 8 and specifically section 57(1) provide, "an amount at least equal to the wages the employee would have earned if the employee had worked the regular hours of work for the applicable termination notice period." In short, Ms. Hutton was being compensated for termination without notice. The mere fact that the compensation paid to Ms. Hutton for termination without notice exceeded the statutory minimum requirement is insufficient to persuade me that it was intended to extend to alleged human rights contraventions arising from her employment with ARC. As such, the sum paid to her does not affect the Commission's authority over the human rights matter which is the subject of Ms. Hutton's complaint. [9] Accordingly, I find no indication in the actual language of the Employee Termination Notice that it contemplated a release or waiver of any alleged human rights violation that might have arisen from events related to Ms. Hutton s employment with ARC. In order to eliminate the jurisdiction of the Commission or the Tribunal, the language of the Employee Termination Notice would have had to be considerably 3 Employment Standards Code, RSA 2000, c.e-9 4

5 plainer. This was the case in Stergiou v. Apache Canada Ltd. 4 As the Tribunal noted in Stergiou, 5 The Release contains a specific clause that acknowledges release of any liability for any past acts of discrimination under human rights legislation. In finding that the Tribunal had no authority to decide the merits of the complaint, Tribunal Chair Lindgren-Hewlett held: 6 The clear thrust of the language of the Release under the heading of human rights, is a complete release of liability for any past acts of discrimination. There is no legal reason to invalidate the clearly worded Release in this instance. [10] On this basis, the Tribunal found that the parties had executed a clearly worded severance agreement which released Ms. Stergiou s employer from liability for alleged human rights violations. While the severance agreement in Stergiou was very clear, it is possible that in some cases more general language may suffice. In any event, the words must be sufficient to provide a more comprehensive release than the Employee Termination Notice executed by Ms. Hutton and ARC which extended only so far as to cover issues of compensation. There is no expression on the face of the Employee Termination Notice of a shared intention, either express or implied, to waive the statutory right that Ms. Hutton has exercised in complaining to the Commission that she is the victim of a human rights violation. In its ordinary meaning, the parties agreement to a payment of two weeks of severance pay as the full and final settlement of any and all claims for compensation with respect to the termination of (Ms. Hutton s) employment does not extend to include a human rights complaint. [11] Without any other language in the agreement to support a larger and more inclusive sense, compensation must be confined to its ordinary meaning which does not extend to compensation for human rights matters which may have arisen in the context of the employer-employee relationship. Therefore, the compensation paid on termination did not address Ms. Hutton s right to make a complaint of discrimination or affect the authority of the Commission. [12] Although I have found that the language of the Employee Termination Notice does not extend to Ms. Hutton s allegations of discrimination, I have also considered the remaining elements discussed by Justice Rooke in Chow, supra. While the parties are ARC as a corporate employer and Ms. Hutton in her individual capacity, I do not find that the fact of their respective positions is sufficient for a finding that this Employee Termination Notice was unconscionable. Nor do I find that ARC exerted undue influence to procure Ms. Hutton s agreement. As for independent legal advice, it is clear that Ms. Hutton did not ask for a delay or an opportunity to obtain legal advice prior to executing the termination agreement and ARC did not offer one. On the facts presented, I do not find the absence of such advice to be determinative of the validity or enforceability of the Employee Termination Notice. In considering the question of duress, I am confident 4 Stergiou v. Apache Canada Ltd., 2015 AHRC 1 5 Stergiou, supra at para. 4 6 Stergiou, supra at para. 20 5

6 from the description of the parties that Ms. Hutton was distressed during her termination meeting and may have felt some pressure when confronted with her impending termination. However, as stated in Chow, supra, mere stress or unhappiness is not a foundation for a finding of duress. Further, the potential for a human rights complaint does not seem to have been known by the parties or to have influenced their dealings at the time of signing and I have not considered it further. Finally, I find no suggestion that either party was lacking capacity at the time the Employee Termination Notice was executed. Decision [13] I find that the Employee Termination Notice appears to be valid and enforceable relative to issues of compensation arising out of the termination without notice of the employer-employee relationship. However, based on the language of the Employment Termination Notice, it does not extend to Ms. Hutton s statutory right to file a complaint with the Commission or the authority of the Commission and the Tribunal over any alleged human rights violation arising out of the circumstances of Ms. Hutton s employment or termination from ARC. [14] The Commission has jurisdiction to continue with this complaint. April 7, 2015 Joanne Archibald, B.A., LL.B. Tribunal Chair 6

7 Appearances Ms. Kristen Hutton, Complainant on her own behalf Mr. David Welsh, Legal Counsel for the Respondent ARC Business Solutions Inc. 7