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Settlement Agreements - Act Part 10, Section 78

Last updated on August 27, 2021

Contents:

Summary
Text of Legislation
Policy Interpretation
Former Legislation and Policy Interpretation (prior to August 15, 2021)
Related Information

Summary

This section provides guidelines for the settlement of a complaint under the Employment Standards Act and the consequences of failure by a party to honour a settlement agreement. 

Text of Legislation

Note: The amended subsection (1) (a) only applies to complaints received on or after August 15, 2021.

78. (1) The director may do one or more of the following:

(a) assist in settling a matter investigated under section 73.1 or a complaint made under section 74;

(b) arrange that a person pay directly to an employee or other person any amount to be paid as a result of a settlement agreement under paragraph (a);

(c) receive on behalf of an employee or other person any amount to be paid as a result of a settlement agreement under paragraph (a).

(2) The director must pay money received under subsection (1) (c) to the person on whose behalf the money was received.

(3) A person who is a party to a settlement agreement under subsection (1) (a) must comply with the terms of the settlement agreement.

(4) If a person fails to comply with the terms of a settlement agreement under subsection (1) (a), the director may file the settlement agreement under section 91.

(5) The application and operation of a settlement agreement under this section must not be interpreted as a waiver described in section 4.

Policy Interpretation

Subsection (1)

Where the director has accepted a complaint, the matter will then be reviewed to decide if the matter should be investigated. When appropriate, the director will endeavour to assist the parties to settle any disputes directly between themselves.

Where a settlement agreement has been reached, the agreement will provide for payment of any agreed to amount, to be paid directly to the employee, or employees, as the case may be, or the director may receive the money on behalf of the employee(s).

Subsection (2)

Where the director receives money on behalf of a person, or persons, the money must be paid to the person(s) on behalf of whom it was received. (See also s.19 of the Act)

Subsections (3) & (4)

Where a person has reached a settlement agreement, the terms of the settlement agreement must be complied with as though it were a determination under s.79 of the Act or an order of the Employment Standards Tribunal.

Note: A settlement agreement is not a “determination”, as defined in s.1 of the Act, and as such cannot be appealed to the Employment Standards Tribunal.

Failure to comply with the terms of a settlement agreement may result in the settlement agreement being filed in Supreme Court under s.91(3.1) of the Act, to be enforced in the same manner as a judgment of the Supreme Court. The collection provisions of the Act would apply for recovery of the debt.

Subsection (5)

Any settlement agreement reached under this section is not considered to be a waiver of the minimum standards of the Act as stated in s.4.

Former Legislation and Policy Interpretation

A transitional provision in section 40 of Bill 8 – 2019: Employment Standards Amendment Act, 2019 provides that complaints received and not resolved before the date the changes to this section came into force (August 15, 2021) are subject to the former text of this section, given and interpreted below:

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Text of Legislation and Policy Interpretation prior to August 15, 2021

Text of Legislation

78. (1) The director may do one or more of the following:

(a) assist in settling a complaint or a matter investigated under section 76;

(b) arrange that a person pay directly to an employee or other person any amount to be paid as a result of a settlement agreement under paragraph (a);

(c) receive on behalf of an employee or other person any amount to be paid as a result of a settlement agreement under paragraph (a).

(2) The director must pay money received under subsection (1) (c) to the person on whose behalf the money was received.

(3) A person who is a party to a settlement agreement under subsection (1) (a) must comply with the terms of the settlement agreement.

(4) If a person fails to comply with the terms of a settlement agreement under subsection (1) (a), the director may file the settlement agreement under section 91.

(5) The application and operation of a settlement agreement under this section must not be interpreted as a waiver described in section 4.

Policy Interpretation

Subsection (1)

Where the director has accepted a complaint, in accordance with s.76 of the Act, the matter will then be reviewed to decide if the matter should be investigated. When appropriate, the director will endeavour to assist the parties to settle any disputes directly between themselves.

Where a settlement agreement has been reached, the agreement will provide for payment of any agreed to amount, to be paid directly to the employee, or employees, as the case may be, or the director may receive the money on behalf of the employee(s).

Subsection (2)

Where the director receives money on behalf of a person, or persons, the money must be paid to the person(s) on behalf of whom it was received. (See also s.19 of the Act)

Subsections (3) & (4)

Where a person has reached a settlement agreement, the terms of the settlement agreement must be complied with as though it were a determination under s.79 of the Act or an order of the Employment Standards Tribunal.

Note: A settlement agreement is not a “determination”, as defined in s.1 of the Act, and as such cannot be appealed to the Employment Standards Tribunal.

Failure to comply with the terms of a settlement agreement may result in the settlement agreement being filed in Supreme Court under s.91(3.1) of the Act, to be enforced in the same manner as a judgment of the Supreme Court. The collection provisions of the Act would apply for recovery of the debt.

Subsection (5)

Any settlement agreement reached under this section is not considered to be a waiver of the minimum standards of the Act as stated in s.4.

 

Transitional provisions connect former legislation and new amendments. Find out more about recent ​transitional provisions and consequential amendments to the Employment Standard Act and Regulation.

Related Information

Related sections of the Act or Regulation

ESA

ESR