New Decision Clarifies Whether Employee Settlements and Releases Can Prevent OHSA Investigations

Employers in Ontario have a general duty to investigate allegations of harassment in the workplace. But can the Ministry of Labour investigate and make an order when the employee making the complaint has signed a release of liability with the employer? The Ontario Labour Relations Board (“OLRB”) in E.S. Fox Limited v A Director under the Occupational Health and Safety Act, 2020 CanLII 75931 [“Fox”] (OLRB) (VC Adam Beatty) held on October 5, 2020 held that the Ministry can still generally investigate and take enforcement action in those circumstances so long as the complaint affects broader health and safety interests in the workplace (beyond just the impact on the complainant).

In the Fox decision, the OLRB considered an employer’s appeal of an order requiring them to investigate an allegation of harassment. The complaint had been made by a Ms. Lisette Bott, a longtime employee who had recently been fired. As part of her termination, she had taken an exit package and signed a legal release of liability. This release had specifically addressed OHSA complaints and harassment and released the employer from further liability. However, three months later, Ms. Bott made an OHSA complaint that her former manager had harassed her for a period of seven years before her termination. She had not reported this previously because the employer’s harassment policy required her to report it to that same manager who was allegedly harassing her. The Ministry of Labour investigated the complaint, and ordered the employer to engage in a proper OHSA harassment investigation. The employer appealed. At the time of the decision, the alleged harasser was still in service to the employer.

The Employer primarily relied on the release they had signed with the complainant. They argued that the OLRB should respect that release and settlement, and reverse the Ministry of Labour’s order. In contrast, the Ministry of Labour (defending their order) argued that the release did not bind them in fulfilling their statutory duty to investigate and make orders for the health and safety of the workplace.

Vice-Chair Beatty, for the OLRB, agreed with the Ministry that the release did not prevent them from making an order. While the OLRB respects settlements generally (except where the settlement is clearly illegal or is based on fraud, coercion, or duress), those principles weren’t the issue here. Instead, the issue was whether the settlement and release applied to the Ministry in exercising their statutory duties in enforcing OHSA. The OLRB held that the impact of the settlement and release in these types of cases depended on whether the complaint was purely personal to the complainant, or whether it also impacted broader health and safety concerns in the workplace. If those broader concerns were also impacted, the Ministry of Labour could exercise its statutory duty to investigate and enforce OHSA.

Here, the alleged harasser remained in the workplace and may have continued to impact the health and safety rights of other workers. In effect, the harasser was an “unchecked workplace hazard”. Further, the harassment had allegedly gone on for a lengthy period of time, and the complainant had been unable to complain due to systematic problems in the harassment policy. These both indicated that the problem was broader than just the impact on the complainant. In light of that, Vice-Chair Beatty held that it was not appropriate to allow the employer to avoid its health and safety duties due to an individual settlement. Instead, the only appropriate way to address those broader impacts was through a proper OHSA investigation (per the Ministry of Labour’s order). The Ministry of Labour also held that there were genuine concerns about “privity of contract”, as the Ministry of Labour had not been a signatory to the release and wasn’t bound by it. That could have been another ground for sustaining the order.

The impact of this decision is that it will be very difficult for an employer to rely on an individual release to avoid their duties to investigate acts of harassment. This is particularly the case where relying on the release would leave a possible unchecked hazard in the workplace. In short, employers will have to actually abide by OHSA as a public interest statute whether or not they come to individual bargains with employees about complaints.

One interesting question is whether an employer can ever rely on a release and settlement now to avoid a duty to investigate. While the OLRB at first makes it sound like a complaint with no broader implications will allow an employer to foreclose an investigation, the privity of contract arguments that the Board also accepted may permit the Ministry of Labour to investigate and make orders no matter what the circumstances.

For these reasons, employers should take extra caution to comply with their OHSA obligations with respect to harassment even where an employee has signed a release. While a release is still invaluable to foreclosing damages to the employee or other liabilities, and can still make the employee promise not to bring a complaint, fundamentally these promises are unlikely to bind the Ministry of Labour when and if they hear the complaint.

PooranLaw will continue to monitor legal developments related to Occupational Health and Safety. In the meantime, if you require legal assistance, we encourage you to reach out to your regular PooranLaw lawyer, or any member of our team.

Note: This article provides general information only and does not constitute, and should not be relied upon as, legal advice or opinion. PooranLaw Professional Corporation holds the copyright to this article and the article and its contents may not be copied or reproduced in any form, in whole or in part, without the express permission of PooranLaw Professional Corporation