October 12, 2012

By Brad Smith

A recent case from the Ontario Superior Court demonstrates the importance of ensuring a terminated employee takes the time to make an informed decision prior to signing a release.

In Rubin v. Home Depot Canada Inc., the employee had worked for the employer for almost 20 years and was 63 years old on the date of termination. The employee was offered financial compensation slightly greater than the Employment Standards Act requirement. The employee accepted the offer at the termination meeting and signed a release.

When the employee started a court action for pay in lieu of notice under the law of wrongful dismissal, the employer defended it on the basis of the release. The Court set aside the release as being unconscionable. The employer was required to pay further compensation.

The lesson learned is that when terminating an employee, the employer should not insist, and should discourage, the employee from accepting an offer during the termination meeting.