In Marquardt v Strathcona County, 2014 AHRC 3, the
Alberta Human Rights Commission ("AHRC")
considered the validity and enforceability of an employment release
that was signed by a departing employee. Marquardt was employed as
a bus driver prior to being involved in two motor vehicle accidents
in 2011. Following these accidents, Marquardt took time off work to
recover. She was deemed fit to resume work as of June 28, 2011 and
returned to work on July 4. On July 11, she left her employment
again for medical reasons. She was deemed fit to return to work by
August 1, 2011 and returned to work on August 22. Eventually,
Marquardt's employer decided to terminate her employment and
presented her with a termination letter, severance payment and a
release. Marquardt accepted the severance and signed the release.
Subsequently in September of 2012, Marquardt filed a human rights
complaint alleging that she had been discriminated against on the
basis of a mental disability.
Releases for Employment Termination: The Five-Point Test for
The Tribunal began its analysis by discussing that a release is
presumed to be valid and enforceable if its validity is not
reasonably put into issue. Therefore, the onus of persuasion is on
the party opposing the validity of the release. The Tribunal
engaged a five-pronged discussion of some key analytical
factors associated with determining the validity of a release:
1. Unconscionability and Consideration
The Tribunal found that the amount of severance offered, while
low, was not so low as to be unconscionable. The employee also
received something of legal value in exchange for the release,
namely, the severance pay.
2. Duress, Undue Influence and Financial Need
The Tribunal summarized that the evidence before it was, at
best, that the employee was "unhappy" about the severance
amount and felt "ill-treated." However, there was no
evidence of coercion, duress or pressure exerted by the employer
with respect to the severance amount or the needs of the
3. Timing of the Termination
The employer was not aware of the employee's mental health
status at the time of termination, nor could the employee offer
evidence that the employer knew, or ought to have known, of her
mental health status. Further, at the time of termination, there
was no evidence that the employer manipulated the timing of the
signing of the release.
4. The Release Itself
The terms were found to be clear and concise since the
termination letter clearly laid out:
the basis for termination;
a calculation of the severance amount;
the requirements for the signing of the release;
confirmation of documents to follow;
a description of benefit plan considerations; and
general best wishes in future.
Significantly, the Tribunal found that "the Release itself
is clear and not overly complex in the language used. The Release
specifically references relevant legislation, including the Act. It
addresses the need for independent legal advice."
5. Lack of Capacity
There is a legal presumption that an adult has the capacity to
contract. The burden lies with the party seeking to overturn the
release to show that they lacked capacity at the time of signing.
While the employee led some evidence to this effect, ultimately the
Tribunal found that the employer's witnesses were forthright
and that there was no evidence of malicious or manipulative
behaviour. The employee was unable to show that she lacked
Tip for Employers: Be Clear, Concise and Forthright When
Drafting a Release
This decision illustrates the importance of being clear and
concise in the drafting of a release, and being forthright when
presenting it to an employee. While employees remain free to
challenge the validity of a release, they must present compelling
evidence to override the presumption of capacity. In the employment
and human rights context, employers can ensure that releases are
upheld by drafting them using simple, plain language, and by
ensuring that the terms of the termination letter and the release
are clearly explained to the employee and by documenting all of the
steps taken throughout.
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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