Contracts of all kinds often fall apart over relatively minor
details, despite the parties' agreement on the majority of
issues. However, without complete agreement, there is no
agreement. Settlements are no different. The Human
Rights Tribunal of Ontario (the "Tribunal") recently
confirmed that this principle is no less true in the context of
human rights litigation.
In Barrett v Willis Canada
Inc, the parties had entered into significant
discussions about settling a potential human rights
complaint. Even though the parties seemed to agree to a
resolution of the majority of the issues between them, the
individual filed a complaint with the Tribunal. The
respondent brought a motion seeking dismissal of the complaint
before the Tribunal arguing that it was an abuse of process,
because there was a settlement agreement between the parties.
The Tribunal found that although the parties had worked
diligently to finalize an agreement, they had not reached agreement
on all of the issues, and at least one was still in dispute at the
time the complaint was filed.
The unresolved issue was the allocation of settlement money.
Anyone who has been involved in the settlement of an employment
related matter is likely aware that the characterization of parts
of a settlement can have significant tax consequences for both
parties, as well as other consequences such as employment insurance
clawbacks. The parties could not agree on the proper disposition of
funds to avoid these consequences.
As a result of the failure of the parties to agree on this final
point, there was no agreement. Without an agreement, there
was no abuse of process and no reason to dismiss the complaint as a
This case is a reminder about the importance of ensuring that
settlements are complete, in writing, and clearly agreed to by both
parties. Failure to ensure that a settlement has these
characteristics will prevent employers from relying on that
settlement in order to shield themselves from litigation.
Usually, matters such as this will settle prior to going to
hearing. However, even in that case, unnecessary legal fees
may be incurred which could have been avoided by ensuring that
fruitful discussions continue to their complete resolution.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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