'It's an employee's right to be able to understand what they're signing': employment lawyer on the enforceability of termination release forms
When terminating an employee, ensuring the enforceability of a release form is a crucial step for employers and HR professionals, and a recent decision by the BC Human Rights Tribunal (HRT) is a perfect example of why that is.
“Absolutely do not have employees sign releases during the termination meeting — at least give them some time to take it away and think about it,” says Kristen Shaw, employment lawyer with McMillan in Toronto.
“Just insist upon that.”
In the case Fyffe v University of British Columbia (2024 BCHRT 88), the tribunal found in favour of an ex-employee of the university, thwarting UBC’s attempt to have her discrimination claim dismissed. The decision hinged on the conditions of the employee’s termination, including communication with an HR representative about a release form, and whether the employee understood the terms.
Although the release was clear, the tribunal determined there wasn't sufficient information to dismiss the employee's complaint; the employee signed a release form during her termination meeting that disallowed her from making any legal claims about her termination.
She said she didn’t understand the terms, and the university argued she should be held to the contract she signed.
Use plain language when drafting employee release forms
The employee is Black, of Caribbean and West Indian ancestry, and is alleging that UBC discriminated against her in her employment, based on race and colour as protected by the Human Rights Code.
The first important factor in making a release form enforceable is ensuring the employee fully understands what they are signing, Shaw says.
“That's what the tribunal here is concerned about, making sure that the terms of the release help the employee understand the scope of what those claims are, what it includes, and what rights they may have that they're waiving through that release,” she says.
“I think it's in everybody's interest that an employee understands what they're signing, so whether they feel they need to get legal advice or not, that's kind of an individual employee's decision. But an employer should never discourage that. It's an employee's right to be able to understand what they're signing.”
Employers should avoid complex legal jargon and instead use plain, straightforward language, Shaw says. Most employees don't have legal training, so simplifying the terms of the release helps ensure that they grasp the rights they are waiving.
Employees must be given time to consider termination release form terms
Shaw also emphasizes that employees should be encouraged to take time to read the release before signing it, even if they insist that they understand — even a day can suffice, but she recommends a week.
As tribunal member Robin Dean wrote in her decision, UBC’s release form clearly required an acknowledgment of understanding from the employee, which is a point of contention of both parties.
The clause stated:
“I further acknowledge that I have read this Release and understand all of its terms, that I have been represented by AAPS [the Association of Administrative and Professional Staff], my exclusive bargaining agent, with regard to this Release and the underlying settlement, and that I have also had the full opportunity to obtain independent legal advice prior to signing this Release. I voluntarily enter into this Release of my own free will.”
The employee signed the release form in the termination meeting, stating to the tribunal that she felt financial pressure because she had to pay rent. In exchange for agreeing not to make future claims of any kind against the university, the release offered three weeks of severance pay on top of the one week of pay in lieu of notice.
Never sign release forms during the termination meeting
The employee told the tribunal she was “emotionally shocked”, “overwhelmed” and “confused” during the termination meeting, that the HR advisor present was vague about the terms, and told that if she “signed the release, she would get more money.”
Employees should never be asked to sign a release during the termination meeting, Shaw asserts; “At least give them some time to take it away and think about it," she says, adding “if an employee is saying they understand, then great, that's awesome. But the employer should say, ‘Even if you understand, take a day to think about it. Don't do it in the moment.’ That's the thing that's really important there, is that they're taking some time.”
The general recommendation is to give employees a minimum of one day, with seven days being ideal, allowing them ample time to review the document, seek legal advice if they choose, and make an informed decision.
The employee insisted that she would not have signed the release form had she understood the terms.
While time to review is essential, Shaw highlights that some employees, particularly those in more senior roles or with previous experience handling similar situations, may not need as much time to make a decision.
However, employers should assess each case individually to ensure fairness and avoid undue pressure. "It may be that they can sign right away," she says, but employers should still consider whether the employee truly has the necessary experience to make an informed decision on the spot.
Public policy implications of release enforcement decisions
Finally, the enforceability of release forms is also a matter of public policy. Courts typically favour the finality of agreed-upon terms, as it benefits both parties by providing certainty. However, Shaw points out that recent legal decisions have shifted somewhat in favour of employees.
“What is important for employers to understand is that it has pulled a little bit more in the employee-friendly side, but what we're seeing in the court is the question of ‘Has it gone a little bit too far? Does it need to shift a little bit back in the other direction, and how far?’”
UBC has filed a petition to the British Columbia Supreme Court, to have the tribunal’s decision struck down, and to enforce the release form and the employee’s termination letter together as a "settlement agreement".
“We're seeing decisions come out where that's being challenged and being pushed,” says Shaw. “So, it's interesting to see this decision, and will be interesting to see what happens with this.”
