AHRC: Merits Of Complaint Are More Important Than Terms Of Settlement Offer

In Lahoda v Canadian Natural Resources Limited, 2026 AHRC 115, the Alberta Human Rights Commission dismissed a complaint because the Complainant had failed to accept a reasonable settlement offer from the Respondent. In doing so, the Commission focused its analysis on the merits of the complaint instead of the proposed terms of the settlement itself.

Most notably, the Respondent’s proposed release contained a confidentiality statement which the Complainant had objected to. The Commission does not seems to have directed much thought whether the confidentiality statement affected the reasonableness of the proposed settlement. Instead, the Commission remained preoccupied with the perceived weaknesses of the complainant’s position and potential payout should the complaint be successful.

The decision signals that respondents may use the Commission’s process to force complainants to choose between a monetary payout or the right to tell their story – a quandary which some may argue is inconsistent with the Commission’s purpose and objectives.

Facts

The key facts are as follows:

• The Complainant, Mr. Lahoda, was employed as an equipment operator for the Respondent, Canadian Natural Resources Limited (CNRL);
• The Complainant suffered a workplace injury on October 16, 2021, when the transport bus he was on hit a bump.
• The Complainant suffered another workplace injury two days later when his hand slipped while carrying a ladder into a haul truck, aggravating the first injury.
• The Complainant had not reported the first injury until after had had sustained the second, believing that the Respondent CNRL discouraged reporting workplace incidents (which the Respondent disputed).
• The injury was debilitating. The Respondent placed the Complainant on leave. He was eligible for and received Workers Compensation benefits.
• The Complainant alleged to WCB and his health care advisors that he had experienced harassment in the workplace. The Respondent learned of the allegations in the summer of 2022, investigated, and found no evidence of harassment.
• The Complainant’s medical providers confirmed that he was able to return to work in September 2022 but could not return to the Respondent because of post-traumatic stress disorder.
• The Respondent sought more information and tried to work with the Complainant to confirm his status and inability to return.
• The Respondent advised the Complainant that the employment agreement was frustrated in April 2023, when it was clear that the Complainant was never going to return to work at the Respondent.
• The Complainant filed a complaint on August 23, 2023, alleging that the Respondent had discriminated against him with respect to his employment under section 7 of the Act.
• The Respondent made a “with prejudice” settlement offer to the Complainant to resolve the complaint by payment of $25,000 in general damages. The proposed release included a confidentiality statement and denial of liability, which the Complainant objected to.
• The Complainant rejected the offer.
• The Director exercised its discretion under section 21(3) of the Act to dismiss the complaint because the Complainant had rejected what the Director considered a reasonable settlement offer.
• The Complainant requested the Chief of the Commission review the Director’s decision.

Analysis / Conclusion

With only limited resources with which to resolve an endless flow of complaints in a timely fashion, both the Director and the Chief of the Alberta Human Rights Commission perform a crucial screening function to determine whether to dismiss complaints or refer them to the Tribunal. Pursuant to the Act, either the Director or the Chief may dismiss a complaint if the Complainant has rejected what they consider a fair and reasonable settlement offer.

The Commission started its analysis by listing some of the principles arising from prior case law:

1. The Chief can consider the merits of the case in determining what is fair and reasonable in the circumstances.
2. The Chief can assess the respective risks of the parties in determining whether a proposed settlement offer is fair and reasonable.
3. There is a range of settlement that would be considered fair and reasonable.
4. To be reasonable, an offer does not have to include all the remedies the complainant is seeking or include the highest award a complainant may be awarded at the Tribunal.
5. The Chief will apply their experience and common sense in assessing what is fair and reasonable in the circumstances.
6. It is normal in settlements for the parties to agree to resolve the dispute without either party admitting wrongdoing or liability.
7. It is not unreasonable to have the matter concluded finally by seeking a full and final release.

The Complainant had argued that the offer was not reasonable because it did not include $40,000 in stocks, options, and grants held in his Solium account as an employment benefit. The Respondent had argued that when the Complainant’s job ended, it had clearly told him in writing that he had 30 days to exercise any options that had vested prior to the last day of employment, and 90 days to close his savings plan account. The Commission accepted the Respondent’s argument and concluded that there was no link between the protected ground and the failure to receive a payout by Solium. The Complainant’s failure to take necessary steps meant that he was at fault for the loss.

The Complainant also raised numerous issues with the Respondent’s proposed form of release, including the confidentiality statement and denial of all responsibility. On this point, the Commission remained consistent with its previous decisions, which state that a respondent need not accept liability for a settlement offer to be reasonable.

After briefly considering the actual terms of the proposed settlement, the Commission directed the bulk of its analysis to the merits of the complaint itself.

After briefly considering the actual terms of the proposed settlement, the Commission directed the bulk of its analysis to the merits of the complaint itself.  These were some of the findings:

1. The Commission’s accepted that the Complainant had one or more disabilities, including post-traumatic stress disorder.
2. The Commission identified the end of the Complainant’s employment as an “adverse event”.
3. The Commission accepted that the Respondent ended the Complainant’s employment because of his inability to return to work, which in turn was clearly linked to his post-traumatic stress disorder.

The Commission’s fact-finding suggests to me the Complainant would likely have established apparent discrimination had the complaint advanced to the Tribunal, which in turn would have shifted the onus onto the Respondent to prove that it had accommodated the Complainant to the point of undue hardship.  Despite  what appears to be a straightforward link between the disability and adverse effect, the Commission concluded, “There is no link between any protected grounds and an adverse effect”.

That said, the Complainant’s own medical providers had stated that the Complainant could not return to work for the Respondent, and the Respondent had requested more information and waited approximately seven (7) months after that to state that the employment relationship was frustrated. The Respondent did appear to have a strong argument regarding the accommodation issue, such that Commission’s conclusions are defensible, notwithstanding the contradictions in its analysis.

The Commission finished its analysis by reviewing case law provided by the Respondent supporting the Respondent’s position that even if the Complainant were successful, he would be entitled to general damages in the range of $5,000 – $22,500. The Commission went on to state that the Complainant had failed to distinguish the Respondent’s case law or provide examples supporting his position that $25,000 in general damages was unreasonable in the circumstances.

The Commission’s comments are troubling in two respects. First, the Complainant does not appear to have been represented by legal counsel, such that the expectation for him to research and rely upon case law appears unfair.  Second, the Commission appears to have shifted the burden to the Complainant to justify his rejection of the proposed settlement, instead of leaving the burden with the Respondent to clearly demonstrate that the offer was fair and reasonable in the circumstances.

The Commission concluded that the settlement offer of $25,000 in general damages in exchange for a full and final release, including a confidentiality clause, was fair and reasonable in the circumstances, and proceeded to dismiss the complaint.

My Take

The Commission’s decision appears to contradict itself somewhat, especially when trying to reconcile the Commision’s factual findings with its analysis regarding the merits of the complaint. Such concerns appear to have arisen from the Commission focusing on the connection between the Complainant’s disability and the termination of his employment.  I would argue this was to the detriment of the real issue in dispute, which was whether the Respondent could have accommodated the Complainant. The distinction is important, because it helps determine who would have to prove what should the complaint have proceeded to the Tribunal.

Another concern is the potential departure from the principle that it is the Respondent who must clearly demonstrate that the settlement offer was fair and reasonable. While not specified in the present case, the Commission has previously held that the Respondent bears the burden of clearly demonstrating that the settlement offer was fair and reasonable in the circumstances. The Commission has also previously expressed that significant caution is required where significant facts relating to the merits of the complaint are in dispute, the complaint raises a novel part of law, or other factors impair the Commission’s ability to assess whether a proposed settlement is fair and reasonable. Such recitals are notably absent from the Commission’s overview of the applicable principles in the present case.

Here, the Commission appears to have already concluded that the settlement offer was reasonable and expected the Complainant to justify his rejection of the same.  I would respectfully suggest this is problematic and tantamount to reversing the employer’s onus to prove the offer was reasonable.

Notwithstanding the above, it is difficult to argue with the Commission’s conclusion regarding the merits of the complaint. The underlying facts do suggest that the Respondent had a valid frustration argument, and further accommodation would likely have resulted in undue hardship.

Lastly, it is arguable that the Complainant focused its analysis too much on the merits of the complaint, and not enough on the proposed terms of settlement offered by the Respondent. To me, the Commission’s unblinking acceptance of a confidentiality statement in what it considers to be a fair and reasonable settlement is concerning.

Confidentiality is not something a Respondent would typically be entitled to in a written human rights judgment.  To the contrary, Tribunal hearings are matters of the public record with decisions frequently published online. Previous decision have emphasized the strong presumption of openness and transparency of the Commission’s process, with anonymization being considered an exceptional remedy granted only where fairness requires or where significant private interests arise.

Given that Tribunal judgments are written and anonymization is considered an exceptional remedy, I think it follows that confidentiality in settlement terms ought to be considered an extraordinary result.

It appears somewhat unfair and completely antithetical to the Tribunal’s purpose and objectives that respondents may insist on settlements containing strict confidentiality provisions that the Commission will pressure complainants to accept for fear that their complaint will be dismissed. Why are respondents entitled to, in the course of settlement negotiations, insist on the equivalent of what would be an “exceptional remedy” should the matter proceed to a hearing at the Tribunal?

I would argue that although a fair and reasonable settlement can include a confidentiality statement, the inclusion of such a statement in light of the Commission’s stated commitment to openness and transparency should at least warrant consideration when examining the reasonableness of the settlement as a whole.

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This blog post is an original work of Bow River Law LLP, first published on Bow River Law’s website.

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