When a person is terminated from their position of employment, it can be an extremely daunting experience, even – or perhaps especially – when the termination arises as a consequence of circumstance rather than fault (a “without cause” termination). Given the many emotions that may accompany being fired, it is understandable that a person experiencing termination may not be best positioned to undertake the clear, rational thinking that is required to objectively assess whether the terms of their termination is reasonable and fair. This is one of the many reasons why it is prudent to engage competent legal counsel in the event your employment is terminated, as an experienced employment lawyer can help you understand what steps to take next, and further, because they are not personally involved, they can provide objectivity when assessing the circumstances.

Termination Initiated by the Employer

When the decision to terminate is initiated by the employer, it is often presented to the employee as a fait accompli – that is to say, a “done deal.” In other words, the employer advises the employee that they are being terminated from their employment and the employee is asked to sign a series of documents agreeing to resolve the employment relationship.

One document that is always included in such circumstances is a “Full and Final Release”, more commonly referred to as a “Release” document. Such a document generally contains the details of the termination, including how much money will be paid to the departing employee in severance, termination or other payments, and when such payments will be made. Most importantly, a Release document always includes language that releases the employer from any further liability related to employment. As such, an employee’s signature on a Release indicates that, by accepting whatever payment is due under the Release, all matters between the parties will be resolved, and the employee agrees that they will be unable to pursue further recovery from the employer in any forum. In effect, this means that once a Release is signed, the employee is prevented from seeking further damages from the employer in any court or administrative tribunal in Canada.

So, what happens if someone ignores the existence of the Release and commences a lawsuit or administrative proceeding anyways? The case of Hall v ESC provides guidance on this particular issue.

Employee Signs Release Commensurate with Termination from Employment

In Hall v ESC, the employer, ESC Automation Inc. (“ESC”), terminated the employment of the applicant, Devin Hall (“Hall”), after approximately three years of employment. At the time of termination, ESC provided Hall with a termination letter and a “Final Account and release letter”, which purported to settle all matters between the parties in exchange for payment of $17,539.20, subject to withholdings and deductions. Hall returned the signed release to ESC four days after he was first presented with the document.

Four months later, Hall commenced this application with the Ontario Human Rights Tribunal, alleging that he had been discriminated against in his employment on the basis of disability. ESC sought to have the matter dismissed as an abuse of process, arguing that the signed release barred Hall from pursuing any further recovery from ESC in relation to Hall’s employment with the company. Hall, however, took the position that the release in question was unfair because its contents had been unclear to him at the time he signed the document. Further, Hall argued that he had been under duress and in a compromised emotional position at the time he signed the Release, given that his employment had just been unexpectedly terminated.

Court of Appeal Highlights Doctrine of Abuse of Process

When the matter came before the Court of Appeal, the Court began by reviewing the principles of the doctrine of abuse of process. The doctrine allows judges and other decision-makers to dismiss claims that it would otherwise be unfair to allow to proceed. In the specific context of a signed release, the Court noted that the purpose of having the parties sign such a document is to resolve all remaining employment-related matters between them.

By signing the release, both parties acknowledge that they accept the terms therein as providing final resolution for all outstanding employment-related disputes. As such, it would be unfair to the employer to allow a claim to go forward when the employer had, understandably, thought the matter was put to rest by the signed release. If courts and tribunals begin to ignore the fact of a signed release and allow parties to proceed with claims after having signed such a document, this would suggest that the release itself is relatively meaningless.

Human Rights Tribunal Dismisses Action as Abuse of Process

In this case, the release in question dictated that Hall “released and forever discharged the respondents from all legal actions, including any claim under the Code, which he had or may have in the future relating to his employment, including the cessation of his employment”. Since the Release was found to be valid and binding, it was left to the Court to determine whether there were any compelling reasons to set the contract aside.

Hall had argued that the release should be voided because he had signed it without fully understanding the true contents of the document. The Court rejected this argument, noting that the release was “clear and unambiguous on its face” and that Hall had been given time to review and understand the document prior to signing. Moreover, Hall’s contention that he had not been of sound mind when he signed the Release was similarly rejected by the Court, which concluded that there was no evidence of any illegitimate pressure having been applied to Hall, nor indeed any evidence of any coercion or pressure whatsoever. In such circumstances, the Court concluded that Hall had “freely entered into a full and final release”, and any attempt to re-litigate the already settled matter between the parties would thus constitute an abuse of process.

For these reasons, the application was dismissed.

Contact Grosman Gale Fletcher Hopkins LLP in Toronto for Advice on Terminations and Release Documents

If you have been terminated from your employment, whether rightfully, wrongfully, or constructively, it is important that you do not sign anything before first consulting with a trusted employment lawyer. At Grosman Gale Fletcher Hopkins LLP, our team of employment lawyers understand how overwhelming it can be to suddenly find yourself dismissed from your job. To help you navigate your next steps, our lawyers will provide you with the guidance and tools necessary to ensure that you receive all of the compensation to which you are rightfully entitled in such circumstances. To learn how we can assist you, contact us online or call us at 416.364.9599.