Ontario worker loses bid to pursue litigation against former employer after signing release

A worker signs a release while management watches in the background. Image; HR Law Canada

A worker who signed a release, resulting in a cash payment and the termination of her employment, has lost her bid to pursue litigation against her former employer.

LG, a unionized employee, worked for New Horizon Systems in Ontario for a number of years. She alleged that exposure to paint fumes in her workplace triggered environment sensitivities, which caused her to be absent from work frequently.

In the summer of 2016, she went on sick leave based on medical documentation that tied her illness to exposure to mold and toxins in the office.

The employer refused to return her to a different work location because Oncidium, its disability management provider, had a medical opinion from its doctor that there was no connection between her work location and her symptoms.

Union files grievance

Her union filed a grievance on her behalf, alleging failure to accommodate and a breach of human rights legislation. The grievance was referred to arbitration and, on Dec. 5, 2016, the parties reached a resolution.

LG signed minutes of settlement (MOS) in which she agreed her employment had been terminated, and she received monetary compensation. The MOS also included a release of her claims against New Horizon.

Later, she filed a complaint with the Ontario Human Rights Tribunal. She alleged discrimination on the basis of disability and reprisal. She said New Horizon refused to accommodate her in the workplace and coerced her into signing the settlement that resulted in her termination.

In January 2020, the tribunal issued its ruling — in favour of the employer. It concluded Graham was not permitted to proceed with litigation in the face of a full and final release. It said the circumstances under which the agreement was signed did not amount to duress or mental capacity.

LG appealed that ruling to the tribunal, which was dismissed. A second attempt for reconsideration was rebuffed and she appealed to the Ontario Superior Court of Justice.

The court ruling

One of the key issues before the court was an argument, put forward by LG, that the tribunal demonstrated a closed mind in relation to her case. At the beginning of the hearing, the adjudicator said: “On signed settlements, I’m an abuse of process person personally.”

The court noted that, on the face of it, those word might cause a concern. But they weren’t put in the proper context, it said.

There were two bases upon which her complaint against the employer could have been dismissed:

  • If the settlement agreement that arose in the context of another proceeding had dealt with the substance of the discrimination complaint (s. 45.1 of the Code) or
  • If the settlement agreement meant that it would be an abuse of process to proceed with Graham’s human rights application.

The adjudicator expressed a preference for the latter, which “was in no way demonstrating a closed mind towards (LG),” the court said.

‘Enormously voluminous’ application: Court

LG was also upset that New Horizons required her to return to the office to collect her belongings and retrieve personal files from her computer, which was harmful to her health. The tribunal, she said, did not address that complaint.

But the court noted her application to the human rights tribunal was “enormously voluminous.” The allegation about returning to work was “buried in materials of over 500 pages, including 15 schedules,” it said.

The tribunal addressed the crux of the issue, which was whether the MOS – the signed agreement – precluded the claims of discrimination against her.

“(It) understandably did not treat (her) specific factual statement about collecting her personal files as a discrete allegation of discrimination,” the court said. “The Tribunal’s approach of subsuming this narrow allegation into the overall case for discrimination against New Horizon was not unreasonable.”

The court dismissed her application, and said the tribunal’s ruling was reasonable and conducted in a procedurally fair process.

The court also awarded costs to New Horizon and Oncidium. Jointly, they sought $30,000 while the tribunal did not seek costs.

LG said she did not have the means to pay $30,000, and would have to declare bankruptcy. But the court noted the respondents were successful and entitled to a meaningful costs award. Based on her financial circumstances, the court awarded $7,500 — $4,500 to New Horizon and $3,000 to Oncidium.

For more information, see Graham v. New Horizon System Solutions, 2023 ONSC 310 (CanLII).

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