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Superior Court Finds Enforceable Termination Settlement in the Absence of a Release on the Basis of Emails and Parties’ Conduct


pink jpgIn Bland v. Canadian Farm Insurance, 2012 ONSC 3021 the Plaintiff was terminated without cause after 15 months of service. He received and accepted certain termination payments without objection and, nine months later, sued for wrongful dismissal.

As the Court noted:

[7] Following his termination of employment, CFIS paid Mr. Bland $15,457.84 (the equivalent of six weeks’ pay), as pay in lieu of notice of termination, and commission owing in the amount of $10,000.00. As a further courtesy to Mr. Bland, CFIS extended his health benefits to September 30, 2008, and allowed him to operate from office space leased by CFIS in Toronto until the end of December 2008.

[8] The Defendants allege that Mr. Bland negotiated, agreed to, and received payment of, a termination package and that no amounts are owing to him as a result of his alleged wrongful dismissal from employment.

[9] It is submitted that in an email dated August 19, 2008, to Mr. Grieve of CFIS, Mr. Bland agreed to the lump-sum payment of one month’s salary in lieu of termination notice. As a courtesy, CFIS provided Mr. Bland with a slightly greater lump-sum payment of six weeks’ salary in lieu of termination notice.

The Plaintiff did not disagree that there had been communications surrounding his termination package post-dismissal; however, he disagreed with the Defendants’ contention that he had agreed that his termination package was limited to what is set out above.

The Court reviewed the following evidence in support of the Defendants’ position:

[18] The parties gave evidence with respect to a series of their email exchanges:

(a) Mr. Bland emailed Mr. Grieve asking for payment of the outstanding commissions, on July 12, 2008, and again on August 5, 2008.

(b) On August 15, 2008, Mr. Bland sent Mr. Grieve a ‘resignation’ email. The subject line of Mr. Bland’s email of August 15, 2008, is ‘Notice of Termination’. In the email, Mr. Bland states “Your monetary settlement offer is greatly appreciated”. He also states:

It will be appreciated if employee benefits for both myself and Samantha can be extended until September 30th to allow an opportunity to find a new position.

(c) On August 19, 2008, in his response to Mr. Bland’s email of August 15, 2008. Mr. Grieve states:

It is my understanding that Valerie has confirmed the following with you:

Regular pay period ending Aug 23

1 month’s notice pay from Aug 23

Commissions in the amount of $10,000

10 day Holiday Pay

It is my further understanding that Valerie is depositing those funds, less the usual government deductions, into your account today. I believe that matches our discussions.

[19] On August 19, 2008, Mr. Bland emailed Mr. Grieve. Mr. Bland stated:

Thanks Bill, Val and I have spoken and all is agreed.

Regards / Alan

 The Court agreed with the Defendants and dismissed the action after noting:

[27] In applying the reasonable “objective observer test” as required by the jurisprudence, I find that the parties did reach a settlement agreement. I find support for this conclusion in the email exchange referred to above, and in particular the fact that Mr. Bland did engage in negotiations with the Defendants, as is evidenced by his request for an extension of benefits, which the Defendants granted. Although Mr. Bland testified that he expected to get a release and a formal offer from the Defendants, I find that such expectation was not reasonable in the circumstances. A reasonable observer would conclude that the Defendants would not pay Mr. Bland the negotiated amounts, extend his benefits, and let him use their office space, if Mr. Bland had not agreed to settle his claim for wrongful dismissal of employment against them. 

Although employers will no doubt welcome a decision such as this, it is always a good idea to formally document termination settlements and include a full and final release so as to reduce the possibility of litigation over what was or was not agreed in relation to an employee’s termination entitlements.

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