Court Sets Out 4 Elements to Set Aside a Release:

In Manak v Worksafe BC ( 2018 BCSC 182 ) Justice Branch had a case where a manger sought to set aside a Release that she had signed upon being terminated with allegations of just cause. Had cause not existed, 18 months would have been proper notice. The settlement was for 4 months.

The Court said all four of these factors were necessary to overcome a Release:

1. A grossly unfair and improvident transaction; and

2. The victim’s lack of independent legal advice or other suitable advice; and

3. An overwhelming imbalance in bargaining power caused by victim’s ignorance of business, illiteracy, ignorance of the language of the bargain, blindness, deafness, illness, senility, or similar disability; and

4. The ¬†other party’s knowingly taking advantage of this vulnerability.

In this case the Court found that the Release was valid because:

  1. Although 4 months was very low, one had to factor in the significant chance that just cause would be upheld, therefore it was not grossly unfair that a compromise was agreed to. In this case the judge actually  held that just cause had been proven.
  2. Although in fact she did not have independent legal advice, she had sufficient time to do so but chose not to, she did her own internet legal research and she lied to her employer and told them that she had received legal advice before signing the Release.
  3. She was a manager, not a “low level ” employee. She was aware of the dismissal process, she had time and access to legal research, she spoke to other managers about her situation and she was not under undue economic pressure as either way she was going to get her ” healthy” pension.
  4. She had adequate time to consider her options. She made her decision in less time than the employer required. She carefully thought through the consequences. She negotiated some modest improvement in the settlement. There was no evidence of pressure from the employer other than the 24 hours that she was given by the employer to accept or reject the offer.