The BC Human Rights Tribunal and the enforceability of releases

What happens when an employee signs a release at the time of termination, then subsequently files a human rights complaint? This question was addressed in Walters v. Fraserway RV, 2019 BCHRT 142 and Fyffe v. University of British Columbia, 2024 BCHRT 88, where the British Columbia Human Rights Tribunal considered whether it would further the purposes of the Human Rights Code to allow the complaints to proceed in the face of a signed release.

In Walters, the employee was employed as a Human Resources Co-ordinator. She was injured on the job and returned to work on a graduated basis. On the day before her gradual return to work was completed, the employer terminated her employment. The employee alleged that in doing so, the employer discriminated against her based on a disability. The employer denied these allegations, asserted that the employee’s termination was due to her poor performance, and argued that the employee was precluded from pursuing the complaint because she signed a release at the time of termination.

In Fyffe, the employee, a woman of Caribbean and West Indian ancestry, alleged that the employer discriminated against her in employment based on race and colour when it terminated her employment. The employer denied these claims, stating that the employee did not possess the skills she expressed having during her interview. The employer also relied on a signed release that was obtained at the time of termination.

Enforceability of releases

In both cases, the tribunal stated that people cannot contract out of their rights under the code: see Insurance Corporation of British Columbia v. Heerspink, [1982] 2 SCR 145. As such, “the fact that parties have entered into a settlement agreement respecting a human rights dispute does not deprive the Tribunal of jurisdiction to hear the dispute”: see Thompson v. Providence Health Care, 2003 BCHRT 58.

That said, the tribunal also held that there are strong policy reasons that favour holding people to agreements they have voluntarily entered into, as set out in Nguyen v. Prince Rupert School District No. 52, 2004 BCHRT 20:

“When parties are able to resolve human rights disputes by way of a settlement agreement, considerable public and private resources may be saved. They may be able to resolve the complaint more expeditiously than would a formal hearing process. The parties may also be able to craft a resolution which more closely matches their needs and interests than would a decision of the Tribunal. Finally, the mediation process itself may be better for the parties’ relationship than a formal hearing. For all of these reasons, the Tribunal encourages and assists parties in attempting to resolve complaints.

The burden is on the person seeking to pursue their complaint in the face of a release to persuade the Tribunal that the purposes of the Code are best served by allowing the complaint to proceed.

In considering the issue, the Tribunal has recognized a number of relevant factors that ought to be considered when assessing a release:

• The language and content of the release.
• The existence of unconscionability (an inequity of bargaining power and a substantially unfair settlement); however, the adequacy of consideration provided by the employer does not affect the release.
• The existence of undue influence (improper use of coercion, oppression, abuse of power/authority, or compulsion by the employer in order to make the employee consent).
• The existence of independent legal advice; however, the reliability of legal advice does not affect the release.
• The existence of duress (related to the timing of the agreement, financial need, etc.); however, mere stress does not affect the release.
• The employee’s knowledge of their rights.
• Other considerations such as lack of capacity, timing of complaint, mutual mistake, forgery, and fraud.   

The Tribunal may also consider the seriousness of the allegations in a complaint and what is at stake for the complainant: see Gerrard v. Olive’s Market Whistler and others, 2015 BCHRT 102.

In deciding that the purposes of the code are best served by holding the parties to the release they agreed to at the time of termination, the tribunal in Walters placed significant weight on its assessment of the weakness of the employee’s claim, the fact that she declined the chance to take the time to review the release before signing, and the fact that her professional qualifications in human resources would have made her somewhat familiar with the concept of a release.

In Fyffe, on the other hand, the tribunal held that it did not have enough information to dismiss the claim because of the release and left the issue to be determined at a hearing.

Best practices for releases

These cases provide an important reminder of the significance of a well-drafted release. Best practices for drafting and obtaining an enforceable release are as follows:

• The termination letter should clearly state that employees will still be entitled to their statutory and/or contractual notice should they not accept the offer for severance and sign the release.
• The release should be written in clear and simple language, so employees can fully understand what they are signing.
• Employers should also provide a reasonable amount of consideration (severance) in exchange for the signed release, especially in situations where the employee has, or may in the future, allege a violation of the code.
• Employers should discourage employees from signing a release during or immediately after a termination meeting. Instead, employers should strongly encourage employees to take the time to read through the release and seek independent legal advice to ensure employees understand the effects and consequences of the release and their rights under the code.
• The termination letter should expressly grant a reasonable time for returning the signed release.

Olivia Oszkiel is an associate at Ascent Employment Law in Vancouver.