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PROCESS AND PROCEDURE - Arbitration - Bars - Prior settlement

Wednesday, March 11, 2020 @ 9:37 AM  


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Appeal by the Bank from a decision dismissing its application for judicial review of an adjudicator’s decision finding that a settlement and release agreement signed by an employee was not a bar to a wrongful dismissal complaint under s. 240 of the Canada Labour Code as determined by a 1997 decision by the Federal Court of Appeal. The appellant argued that the 1997 decision should no longer be followed. The respondent’s employment was terminated by the appellant for cause. The respondent agreed to accept a lump sum payment and signed a settlement releasing the appellant from all claims arising out of the termination of her employment. Shortly after having signed that agreement, the respondent filed an unjust dismissal complaint. The appellant argued the 1997 case should not be followed as it disincentivized employers from settling with employees.

HELD: Appeal dismissed. The adjudicator did not err in following the 1997 case. The presumption of reasonableness review applied and was not rebutted either by clear legislative direction to the contrary or out of respect for the rule of law. The Federal Court therefore identified the proper standard of review. The appellant’s argument that the 1997 case was wrongly decided and should be overturned because it conflated prospective and retrospective waivers of statutory rights was without merit. There were also no compelling policy reasons to depart from the 1997 case. While settlement agreements were to be encouraged and employers might be tempted to provide no more than the minimum entitlements in the first 90 days following termination, these were policy choices that were best left to Parliament.

Bank of Montreal v. Li, [2020] F.C.J. No. 95, Federal Court of Appeal, J. Gauthier, Y. de Montigny and J.B. Laskin JJ.A., January 24, 2020. Digest No. TLD-March92020007