An employee’s claim against her former employer under the Ontario Pay Equity Act was barred by virtue of the release and settlement executed by the employee upon her termination

22. March 2005 0

Administrative law – Employment law – Termination of employment – Pay equity – Decisions of administrative tribunals – Human rights complaints – Discrimination – Wage disparity – Settlements – Releases – Validity – Judicial review – Compliance with legislation – Standard of review – Correctness

Bucyrus Blades of Canada Ltd. v. McKinley, [2005] O.J. No. 231, Ontario Superior Court of Justice, January 24, 2005, L.K. Ferrier, D.S. Crane and R.W.M. Pitt JJ.

B.B. Ltd., the former employer of the Respondent, McKinley, applied to the Ontario Divisional Court for judicial review of a decision of the Pay Equity Hearings Tribunal (the “Tribunal”) confirming an Order of the Review Officer that directed B.B. Ltd. to implement certain procedures and pay equity adjustments to the Respondent pursuant to the Ontario Pay Equity Act, R.S.O. 1990, c. P.7, (the “Act”).

In 1998, B.B. Ltd. consolidated its business and, in that process, moved the job of General Office Clerk from Ontario to Ohio, resulting in the termination of the Respondent’s employment. Prior to accepting a termination package, the Respondent obtained legal advice and thereafter entered into a settlement with B.B. Ltd. through a document entitled “Release and Acknowledgement”. However, the Respondent continued with a complaint that she had filed the previous October with the Pay Equity Commission. A Review Officer with the Commission held that any rights of the Respondent under the Act were not defeated by the Release since the Act was not specifically mentioned in the Release.

B.B. Ltd. requested a review of the decision of the Review Officer before the Tribunal. A hearing was held and the Tribunal made an Order confirming the Order of the Review Officer. The employer then applied to Divisional Court for judicial review of the Order of the Tribunal.

The Release stated in part that the Releasor had no further claim against the Releasee “for or arising out of her employment with the Releasee or the termination of such employment including without limiting the generality of the foregoing, any claims for pay, overtime pay, interest, benefits, and/or vacation pay and specifically including any claim under the Employment Standards Act of Ontario, the Human Rights Code of Ontario, or any other similar legislation governing or related to the employment of the Releasor”.

It was accepted by the parties on the judicial review that the Act was human rights legislation.

The court noted that it was clear from the Reasons of the Tribunal that it had engaged in a legal interpretation of the parties’ agreement, applying the common law of contract. The review standard of correctness therefore applied. The Court held that the Tribunal made the finding that the Release did not include the Act without deciding that excluding the Act from the words “or other similar legislation” of the Release put those words in conflict with the “full and final release” provision of the Release. The court concluded that the Act was “similar legislation” to the Human Rights Code in the context of this contract. The court held that the parties were to be bound by their agreement and there was no basis not to enforce the parties’ contract for public policy reasons. The court held that the Respondent employee was found to have resolved her interest in a pay equity plan by way of her contractual settlement with B.B. Ltd. The application for judicial review was therefore allowed and the decisions of the Tribunal and the Review Officer were quashed.

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