Human Rights Claims After Termination of Employment: A Valid Release Puts the Past in the Past
August 2023 - 4 min read
Signing a release – or requiring an employee to sign one – should never be taken lightly. Nearly 25 years ago, the Alberta courts clarified that while an employee cannot contract out of their human rights protections, an employee can indeed sign away their right to bring a human rights claim against a former employer. A recent decision from the Alberta Human Rights Commission reminds us that an employee’s human rights complaint will not be able to proceed if the employee has signed a valid release upon the termination of their employment.
After working for Canadian Tire Corporation Limited for ten years, Ismail received just shy of four months’ working notice that his employment would be terminated as part of a corporate restructuring. Near the beginning of the working notice period, Ismail signed a release entitling him to an additional severance package. Ismail asked questions about the release, and confirmed he had no more questions before signing it. Near the end of the working notice period, Ismail applied, unsuccessfully, for another position with Canadian Tire. After the working notice period ended and Ismail’s employment ended, Ismail made a human rights complaint alleging he had faced discrimination before and after his employment was terminated.
Ismail’s complaint was dismissed at the screening stage of the human rights complaint process, and on review the dismissal was upheld because:
- The release barred Ismail’s complaint from proceeding with respect to events that occurred before he signed the release; and
- No evidence corroborated his belief that his application for the new position was passed over for discriminatory reasons.
In confirming the dismissal of Ismail’s complaint, the Chief of the Commission and Tribunals reviewed some of the factors that may be useful in assessing the validity of a release:
- The language of a release;
- Unconscionability based on an inequality in bargaining power and substantial unfairness;
- Undue influence, if one party has used coercion, oppression, abuse of power or authority, or compulsion to make the other party consent;
- Whether parties have accessed or had an opportunity to access independent legal advice;
- Duress (beyond mere stress or unhappiness) and sub-issues such as timing or financial need;
- The knowledge of the party executing the release as to their rights under the Alberta Human Rights Act, and possibly the knowledge of the party receiving the release of a potential complaint; and
- Other factors such as lack of capacity, the timing of the complaint, mutual mistake, forgery, fraud, and so on.
The release signed by Ismail not only stated he had no further claim against his employer, but also included an acknowledgement that his rights under the applicable human rights legislation had been complied with by his employer, and that the release could be raised as “an estoppel and complete bar” to any claim he might bring against his former employer. None of the information gathered about Ismail’s complaint reasonably put the validity of the release in dispute. Therefore, even though the alleged facts about Ismail’s treatment during his employment were troubling, the release barred the Human Rights Commission from reviewing those issues “because they were fully and finally settled and addressed in the release.”
Although Ismail’s complaint about events that occurred after he signed the release was also dismissed because it had no reasonable prospect of success, the Chief of the Commission and Tribunals emphasized that a valid release applies only to past discriminatory acts and not to future acts. Parties can agree to leave the past in the past but cannot contract out of human rights protections on a go-forward basis.
Takeaways for Employers + Employees
Sometimes a just-terminated employee makes the mistake of thinking they can sign now and get advice later. There’s not much a lawyer can do to help in those circumstances unless there is a problem with the validity of the release. Employees need to seek advice before signing a release. Meanwhile, employers are best protected by ensuring they have solid releases and a legally sound approach to termination before terminating an employee. If you are an employer or an employee navigating a termination where there may be human rights concerns, please contact Kimberly Precht in Edmonton, Steve Eichler in Calgary, or any member of Field Law’s Labour + Employment Group for guidance and assistance.
Link to decision: Ismail v Canadian Tire Corporation Limited, 2023 AHRC 65