'You can't contract out of statutory minimum obligations' with mandatory release: lawyer
![Fired worker refuses to sign release to get severance; employer hit with $25,000 in punitive damages](https://cdn-res.keymedia.com/cdn-cgi/image/f=auto/https://cdn-res.keymedia.com/cms/images/ca/126/0422_638737800670552881.png)
“In a situation where an employee is particularly vulnerable and the employer seems to be looking to strategically benefit from that employee's vulnerability, that's not going to be looked at fondly by the courts.”
So says Glen Stratton, an employment lawyer at Ascent Employment Law in Vancouver, after a British Columbia court awarded a worker five months’ pay plus $25,000 in punitive damages, where the employer required her to sign a release before receiving termination pay.
The worker was a key accounts manager for Revolution Resource Recovery, a waste collection company in Vancouver. She was hired in June 2016 and managed the company’s existing clients.
Before she started her position, the worker signed documents establishing her salary, bonuses, and commissions. To receive commissions, she had to be an “active and current employee” at the time payment was due. The bonuses were paid at the company’s discretion when she reached certain objectives for signing and re-signing accounts.
About two weeks after she started, the worker signed a confidentiality, non-solicitation, and non-competition agreement.
In May 2019, Revolution wanted the worker’s role to focus more on new business development, but the worker said that she hadn’t been hired as a sales representative for new business and didn’t want to take on that role.
Family illness
In July, the worker informed her manager that her mother was suffering from dementia and she would miss some work to move her mother into a care facility. Her mother’s condition deteriorated quickly, so she had to take more time to care for her. She sent several emails to her manager describing her efforts to arrange temporary private care and, on July 31, she advised that the temporary care worker hadn’t shown up so she couldn’t come to work.
The manager acknowledged the worker’s family issues, but said she needed to focus on new business development and start meeting sales quotas. She continued to assert that she hadn’t been hired for sales representative work, leading to tension at work.
The manager scheduled a meeting with the worker for Sept. 27, but the worker was ill and cancelled. She thought it was to discuss her work, but the manager intended to terminate her employment. The manager emailed her a termination notice advising that her position had been declared redundant and she would receive “all wages and commission to this date” plus four weeks’ severance. The notice also stated that “by accepting this payment, you acknowledge that you have no claims against Revolution Resource Recovery Inc., its related companies, officers, and management [in] relation to your employment relationship.”
The company gave the worker a cheque for $7,792.92. However, the worker wrote to her manager to say that she was entitled to more termination pay under the common law and she didn’t accept the company’s severance offer. She also noted that employment standards legislation required an employer to pay everything owing to the employee within 48 hours of the last day worked. She requested to be paid by direct deposit – as she was normally paid – and be given a written breakdown of the amount paid.
The worker also claimed entitlement to unpaid bonuses and sent a chart of her sales and retention activities. Revolution didn’t respond.
Worker refused to sign release
Revolution sent a package with a release to the worker, but the worker refused to sign it. She wrote to the manager on Oct. 2 advising of her refusal and asking again to be paid by direct deposit and an explanation on how Revolution calculated its severance offer.
The worker went to the office to pick up her personal items and again refused to sign a release.
On Oct. 7, the company alleged that the worker had breached the restrictive agreement by failing to return all confidential company information and misusing company information in putting together her chart of sales. It threatened legal action if it lost any revenue because of her actions.
Around the same time, the worker was offered a position as an account manager for another waste management company, but she declined because the pay was significantly lower and she was concerned about the restrictive agreement with Revolution. She was also occupied with her mother’s health issues.
On Oct. 17, the worker deposited the cheque that Revolution had sent her. She eventually found a position with an organic waste nutrient recovery facility run by a former client on March 15, 2020.
Wrongful dismissal claim
The worker sued Revolution for wrongful dismissal, claiming eight months’ reasonable notice plus punitive damages. Revolution countered that three to four months was appropriate. It also argued that by depositing the cheque, she accepted its offer to release it from any claims, despite her earlier refusal.
The court found that the worker was consistently clear that she wouldn’t agree to a release of her termination entitlements. The fact that she eventually cashed the cheque wasn’t sufficient to demonstrate that she changed her mind in the absence of her signing anything, the court said.
“The worker made it clear that she felt that she was entitled to common law reasonable notice and she wasn't going to sign a release which relinquished her from pursuing that claim,” says Stratton. “That was enough for the court to find that there was no express acceptance of the terms of the release.”
After applying the traditional Bardal factors – such as the worker’s specialized knowledge-based position in the waste management industry, her three years and four months of service, her age of 56 at the time of termination, the availability of comparable roles, and the restrictive agreement that caused the worker to decline at least one job offer, the court determined that six months was appropriate reasonable notice. It disagreed with Revolution’s argument that her role had highly transferrable general sales skills.
However, the court reduced the notice period by one month, finding that the worker wasn’t fully diligent in seeking alternative employment. By the worker’s own admission, she was “choosy” about applying for jobs because she didn’t want a position focused on new sales business development and she was distracted by the situation with her mother, so she wasn’t doing all that she might have otherwise.
Commissions included
The court also found that the worker was entitled to commission earnings in her notice entitlement. Although Revolution’s employment terms specified that employees must be active to receive commissions, this clause didn’t unambiguously limit her common law right to damages for the reasonable notice period, said the court. Based on the worker’s average commission earnings in 2019, the worker was entitled to $6,399.62 per month, totalling nearly $32,000 for five months.
The worker also sought unpaid bonuses earned through account signings and re-signings between May 2018 and September 2019, but the court dismissed this claim, citing insufficient evidence to support her calculations and her acceptance of Revolution's discretion in applying bonus policies during her employment.
The court found that Revolution breached its duty of good faith and fair dealing in the manner of the worker’s dismissal when it withheld her statutory termination pay, offering instead a cheque conditional upon her waiving further claims. It also refused to provide a breakdown of its calculations or address her concerns, despite her financial and personal vulnerabilities at the time, which the court called “reprehensible.” The court awarded the worker $25,000 in punitive damages as deterrence for employers in similar circumstances.
It was a big misstep by Revolution to seek a release and make it mandatory for the worker to receive her statutory minimum pay, says Stratton.
“That was the big pitfall and the reason that the court awarded punitive damages - you can't contract out of statutory minimum obligations under employment standards,” he says. “If the employer was looking to get a full and final release such that the employee would be relinquishing any right to sue, I would have advised it to offer something over and above statutory minimum - the amount would depend on what sort of reasonable notice to which the employee would be entitled.”
Revolution’s bad-faith conduct also involved trying to take advantage of the worker when she was in a financially precarious and emotionally vulnerable position, says Stratton.
“The company was aware that the worker was suffering from a family crisis and she had the unexpected expenses of paying for private care, and they were also aware of the fact that her commission earnings had declined in the period immediately preceding her termination to deal with her mother's situation,” he says. “To try to get the employee to agree to a release or a separation package that doesn't fairly represent the employee’s legal entitlements [when she is vulnerable] will be seen as abusing the already existing power imbalance between the employer and the employee.”
In total, Revolution was ordered to pay the worker five months’ salary and commissions and $25,000 in punitive damages, plus costs.
See Thompson v. Revolution Resource Recovery Inc., 2025 BCSC 8.