I read an interesting case recently that could be considered controversial: an employer was permitted to contract out of its human rights obligations with some vulnerable employees who were at an economic disadvantage and who experienced significant language barriers. How did the employer accomplish this? The employer added a provision in its termination letter that offered the employees consideration in exchange for signing releases preventing them from launching a human rights complaint.
The employer terminated several employees following a reorganization of the company and a resulting closure of one location. The terminated employees had worked with the employer for between one and seven years. Many of the employees involved spoke mainly Spanish and had limited skill in English.
The employees were provided with identical letters that set out the amount of specific termination notice and severance, depending on length of service of the particular employee. The relevant part was a release in exchanged for a lump sum payment of two weeks’ salary.
The employees had to sign the letter accepting the additional payment in exchange for the release. The letter affirmed the employees were aware of their rights and that they were to be given sufficient time and opportunity to get independent legal advice before signing. The contents of the letters were explained first in English and then translated into Spanish for the employees. The employees took the opportunity to speak with two lawyers at the Centre for Spanish Speaking People. In the end, they all signed the release.
Eventually, the employees wanted to bring a claim at the Human Rights Tribunal alleging discrimination on the ground of ethnic origin. The tribunal refused to hear the matter because the employees signed the release. The workers were presented with the release; they were informed of the contents of the release in Spanish; they were told to get independent legal advice, which they did; and they voluntarily signed the releases and received consideration. The employees’ lack of sophistication and poor economic circumstances were not sufficient to set aside the terms of the release.
Counsel for the employees argued that it was “grossly unfair” to uphold the releases given that the employees were economically vulnerable and had no choice but to sign the releases. The tribunal responded, “I do not find it appropriate for the Tribunal to second-guess parties who have, after obtaining legal advice, decided to enter into an agreement giving up those rights for monetary consideration”.
Ultimately, the releases were enforceable and the employees could not bring their human rights claim to the tribunal.
Do you think the employees had a “choice” here? Were the employee and the employer parties contracting with equal bargaining power such that the releases should be enforceable? Do you think that a severe language barrier or economic disadvantage should have been taken into consideration in this case?
First Reference Human Resources and Compliance Editor