Release Found to be Void due to Unconscionability:

In Saliken v Alpine Aerotech Limited Partnership ( 2016 BCSC 832 CanLII) the Court found that a release signed by the plaintiff at the time of his  termination was invalid due to unconscionability or as the judgement said ” The issue is whether the transaction, seen as a whole, is sufficiently divergent from community standards of commercial reality that it should be rescinded” .

The reasons were as follows:

1) The only consideration paid to the Plaintiff was relief from the alleged obligation to repay the balance of a training loan in the sum of approximately $8,000. The Court found that under the terms of the loan agreement nothing was owing as he did not quit but rather was terminated without cause. Thus there was no consideration for the release.

2) The Plaintiff was required to sign the release on the spot in ” circumstances of distress and concern for supporting his family”. The entire meeting only lasted 15 minutes.

3) The termination documents were false and misleading in that they wrongly suggested that the Defendant had just cause, which they did not.

4) Whether the Release was signed or not the Plaintiff was entitled to his minimum termination payments under the ESA, which was two weeks pay.

5) Given the Plaintiff’s limited education ( Grade 11) and the legalese of the Release, the Judge doubted that the Plaintiff truly understood what he signed. The meaning of the documents was not explained to him at the time .

6) He was told by the Employer that unless he signed the Release he would not receive a cheque for his outstanding wages.

Having set aside the release the Court ordered the Employer to pay 6 months notice to a 54 year old Helicopter Mechanic making a salary of $68,000 who was only with the Employer for 1 year and 3 months.

Lessons to be learnt.

NEVER have a dismissed employee sign a Release on the day of termination.

You pay nothing, you get nothing. Don’t be a cheapskate.

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