I know I am dating myself, but for me the word "release" conjures up that old George Dorsey (a.k.a. Engelbert Humperdinck) chestnut, Please Release Me, which topped the pop charts in the early 70’s. Of course, employers have asked dismissed employees to do just that since the law of master and servant began. The trouble for many employers is that they have been using the same approach to a without cause dismissal and a release of claims since Please Release Me first came out. Given the Guide to Releases with Respect to Human Rights Complaints recently issued by the Ontario Human Rights Commission (OHRC), it is time for this approach to undergo a major overhaul.
The Guide is intended to set out clear guidelines as to when a signed release entered into at the time of termination of an employee’s employment will cause the OHRC to choose not to deal with a subsequent human rights complaint following an apparent settlement. Section 34(1)(b) of the Ontario Human Rights Code (the "Code") gives the OHRC the discretion not to deal with a complaint "made in bad faith". In the past, language in a release in which a dismissed employee acknowledged that the filing of a complaint would constitute bad faith has been relied on by employers for the purposes of section 34(1)(b). According to the OHRC, that is not enough.
The issue turns on whether the release is viewed as an attempt to contract out of the provisions of the Code or evidences a settlement of all human rights related matters. How is one to distinguish one from the other? According to the OHRC, it requires some evidence that the parties turned their minds to the human rights issue. The Commission provides the following guidelines to ensure that a release of claims includes a valid release of human rights complaints:
- An employer should, at the time of termination, ask the employee orally or in writing whether there are any outstanding human rights issues or concerns
- The employee should be given a reasonable opportunity to consult an independent counsel or advisor
- If the answer is "yes", the employer should ask for details in order to assess what would be a reasonable offer for settling the human rights issues and optimally prepare minutes of settlement, in addition to the release, which expressly deal with the human rights issue
- If the answer is "yes", the standard form of release should be altered to include a clause that separately recognizes that there is a human rights issue which has been fully resolved
- If the answer is "no" the release should state that the employee has had the opportunity or in fact has obtained independent legal advice, is aware of the employee’s rights under the Code and represents that he is not asserting such rights or advancing a human rights complaint
Other tips contained in the Guide include allocating a specific amount of the settlement funds to the human rights issue, if one is raised.
From an employer’s perspective, the Commission’s world is far from real. Normally, at a dismissal meeting the employer proposes severance arrangements which the employer intends to implement and which are usually already documented in a letter of termination or severance agreement. Asking an employee at that meeting whether he has any human rights issues or concerns is tantamount to waiving a red flag. If such an issue had been previously raised, the Commission’s approach makes sense. If a concern has not previously been raised, in the writer’s view an employer may wish to consider raising it in the written material, rather than orally at the meeting.
For example, a termination letter could include something like the following:
As a condition of the foregoing severance arrangements, you are to provide a signed copy of the enclosed form of release. Please note that the release is a complete release of all claims and complaints that you had, now have or may have relating to all matters including any and all human rights issues or concerns under the Ontario Human Rights Code. By signing the release you are confirming that you either do not have a human rights concern, or that any concern you have has been settled to your satisfaction. Please feel free to consult an advisor concerning the severance arrangements set out herein and the contents of the release, before returning a signed copy.
The release itself should also contain language that expressly addresses the human rights issue. If a prior concern has not been raised, it may say the following:
I expressly acknowledge and confirm that having knowledge of my rights under the Ontario Human Rights Code (the "Code") I have no complaint of any kind arising under the Code against [Employer].
If the settlement actually includes a settlement of a human rights concern, the release could say something like this:
I expressly acknowledge and confirm that the consideration set out above includes an amount [if an amount has specifically been allocated, say so] which fully and finally resolves any and all human rights issues and complaints under the Ontario Human Rights Code which I now have, have had or may have as of the date hereof as against [Employer].
Other suggestions are contained in the Guide which is available on the OHRC’s website at www.ohrc.on.ca.
Employers are well advised to ensure they understand the OHRC’s position on this issue and are using an updated form(s) of severance letter and release to best protect themselves. Otherwise, they may become familiar with another old Humperdinck chestnut: There Goes My Everything!
The foregoing provides only an overview. Readers are cautioned against making any decisions based on this material alone. Rather, a qualified lawyer should be consulted.
© Copyright 2006 McMillan Binch Mendelsohn LLP
