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Employees Can Commence Wrongful Dismissal Actions After Cashing Severance Cheque: BCSC
May 9, 2002

In a recent decision, Lambert v. Digital Rez Software Corp., the Supreme Court of British Columbia has determined that an employee is not necessarily precluded from commencing a wrongful dismissal action when she has already accepted and cashed a severance cheque. In this case, the employee was ignorant of her right to a substantially larger severance payment than the one which she accepted. When she later learned of her rights at common law, she brought an action against the employer for wrongful dismissal. The employer argued that the employee had already accepted a severance payment and was therefore barred from bringing the action for wrongful dismissal. The judge ruled that the employee did not enter into a contract with the employer to accept the minimal severance pay in full satisfaction of her legal rights and, alternatively, if she did, such a contract was unconscionable and unenforceable. The judge therefore awarded the employee the additional severance monies to which she was entitled pursuant to the common law.

(Click here for full text of judgment)