Wednesday, January 09, 2008

A Release is a Release Is a Release...

Howard Levitt reports in the Financial Post on a decision of the Ontario Superior Court of Justice in which the Court refused to set aside a severance agreement executed by a long-term employee who had been dismissed after fourteen years of service.

He had chosen against obtaining legal advice prior to reaching a settlement with his former employer, and executed a full and final release of all claims arising from the termination of his employment. Subsequently, he claimed the severance package was so unfair as to justify the Court's intervention to quash it.

The Court did not agree with his position, as Mr. Levitt notes:

Justice Kenneth A. Langdon of the Ontario Superior Court of Justice ruled the package was not unconscionable and would not be set aside. While there was evidence of pressure on Barr to sign, the bargain he made was not unacceptable. Public policy demanded finality in upholding releases, the Court said.

The message is clear - employees who have been wrongfully dismissed should seek legal advice before concluding a severance agreement with a former employer.

Serious legal obstacles will likely be encountered in any subsequent attempt to reopen the matter, even if the agreement was obviously unfair or miserly.

- Garry J. Wise, Toronto

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