Canadian Employment Law Today

November 17, 2021

Focuses on human resources law from a business perspective, featuring news and cases from the courts, in-depth articles on legal trends and insights from top employment lawyers across Canada.

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Canadian HR Reporter, 2021 Canadian Employment Law Today Canadian Employment Law Today | | 7 More Cases More Cases Two severance package options True to his word, the vice-president met with Bayes on Aug. 14 and formally terminated Bayes' employment. Bayes was given a letter of termination that provided him a choice of one of two compensation options — income pro - tection that would continue his pay and ben- efits for 52 weeks, or a lump-sum retirement payment equal to 75 per cent of his salary along with short-term incentive payments. If he chose the former, the income protection would be ter - minated if he stopped searching for work dur- ing the 52-week period. If he chose the lump- sum retirement payment, he would have to sign a full and final release. He had until Aug. 23 to make his choice; otherwise he would automati - cally go on income protection for 52 weeks. RBC strongly encouraged Bayes to seek "in- dependent professional advice regarding the in- formation contained in this package, including confirmation of the financial and tax implica- tions." The bank also named an individual at RBC who could answer any questions he might have about the options. Three days later, on Aug. 17, Bayes emailed that individual to say he had received legal ad - vice and wanted to clarify that, for the income protection plan, he wasn't able to immediately search for new employment because he had been off sick with work-related stress and was "not ready to even think about finding alter - native employment." He said if the job-search requirement was removed for medical reasons, he would be willing to sign a monthly release for the remaining declarations. He added that he didn't want to disclose his personal health issues "for medical privacy reasons." Although Bayes claimed he had received legal advice, he had actually only spoken to someone from his golf club who mediated labour dis - putes in a social setting. RBC responded by saying that if he was medi- cally unable to find work, he should appeal the decision of the disability insurer that had de- nied him disability coverage. If his appeal was successful and he was approved for coverage, RBC would pause his income protection and resume it when he was well enough to look for work. Bayes then informed RBC that he had been diagnosed with arthritis in his back and he had trouble sitting. He was also due to see a cancer specialist in two weeks, so he wasn't sure if he was well enough to start working. He asked if he could delay his retirement decision and receive income support until "the matter is clarified." Extension granted RBC granted Bayes an extension on the deadline to make a decision until Sept. 5, after which he would have seen the specialist. It reiterated that if he selected the 52-week income protection option and he had to remain off work for medi - cal reasons, it would pause the income protec- tion until he was well enough to resume his job search. After his appointment, Bayes requested another extension until Oct. 11, when he had a follow-up appointment. RBC refused, as it had already given him three weeks. On Sept. 5, Bayes sent a copy of the completed form in which he selected the lump-sum retirement payment and a signed release. Later that month, while discussing the payment schedule, Bayes said that he was "happy to go ahead with the… retirement option." RBC paid him $90,604, the equivalent of 75 per cent of his annual salary. More than a year later, in October 2018, Bayes sued for wrongful dismissal damages stemming from its failure to protect him from bullying and harassment, damages for the torts of ha - rassment and negligence, moral damages for a bad-faith manner of dismissal, and punitive damages. He also argued that because his dis- ability coverage had expired and he was unable to search for work, he had no choice but to ac- cept the lump-sum payment under duress. RBC filed a motion to have Bayes' action dis- missed due to the release he signed. The court found that the release was broad in scope and purported to release RBC and its employees from all the claims in Bayes' law- suit. In addition, he received consideration for signing the release — the lump-sum retirement payment. It was a legitimate document and the only way for Bayes' action to be allowed to con - tinue would be for the release to be unenforce- able, said the court. Although Bayes had some objections to the requirement to search for other employment that was part of the income protection option, there was no indication that he objected in principle to signing the release or the fact that he was required to sign it. He asked for a couple of extensions, but he indicated that he would be willing after getting more information on his medical condition. The court noted that if Bayes hadn't signed the release, he still had the option of selecting one of the options or seek legal advice and be - gin litigation. He also could have selected the income protection option and sought disability coverage that would have paused it, but there was no evidence that he tried to appeal the expi- ration of his disability benefits. In addition, Bayes said that he had received legal advice, although he really hadn't. It was fair for RBC to accept that he had received advice and he "was not an unsophisticated individu - al." Although RBC was in a superior bargaining position, Bayes was knowledgeable, as he had experience as a police officer, security consul- tant, and private investigator for law firms. "Mr. Bayes is not a lawyer, but he is familiar with legal systems and workplace harassment," said the court. "These facts suggest that Mr. Bayes was not entirely powerless in his bargaining po - sition and that he ought to have some apprecia- tion of the importance of seeking legal advice." The court found no evidence of coercive pres- sure from RBC to sign the release or any protest from Bayes. Bayes was given a two-week exten- sion to consider it and was strongly encouraged to seek legal advice, so there was nothing indi- cating that the signed release was unenforce- able. The court ruled that a trial wasn't necessary to determine if the release was enforceable, as the evidence was straightforward. Bayes' action was dismissed. For more information, see: • Bayes v. RBC, 2021 ONSC 6836 (Ont. S.C.J.). « from ONTARIO WORKER'S on page 1 Worker granted 2 extensions to choose severance package Employment law blog Canadian Employment Law Today invites you to check out its employment law blog, where editor Jeffrey R. Smith discusses recent cases and developments in employment law. The blog features topics such as liability in the hybrid workplace, accommodating employees' need to care for family members and workplace sexual harassment. You can view the blog at There was no indication that the worker objected in principle to signing the release or the fact that he was required to sign it.

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