Settlement Agreements: Essential Terms And The Importance Of Consensus

A recent decision of the Supreme Court of Newfoundland and Labrador, Mifflin v North Atlantic Refining Limited, 2017 NLTD(G) 140, demonstrates that Employers may be held to a settlement agreement if a consensus is reached on its essential terms, despite there being a continuance of a dispute as to its non-essential terms.

Facts

Glenn Mifflin ("Mifflin") was a senior executive of North Atlantic Refining Limited (the "Employer") for a period of 25 years, from 1988 to 2013. In January 2013, following a change in ownership, Mifflin was terminated without cause. Throughout 2013, the parties attempted to negotiate a settlement agreement and by mid-December had agreed upon several key terms, including a lump sum payment in lieu of notice, an effective retirement date, the necessity of a Release, and the conversion of unused vacation time to cash. Just prior to the December 17th deadline for settlement, there was a breakdown in negotiations, which was precipitated by the