A man fired by the St. Albert Catholic School District over a sex change operation is refusing to accept what's considered a ‘generous' compensation package because it would entail dropping a human rights complaint.

Jan Buterman was dismissed from his job as a substitute teacher in 2008 after he received a letter praising his abilities but stating his values were not in line with the Catholic Church.

He says he has since been offered $78,000 cash or a one-year teaching job, with either option granted on condition he keep quiet.

Buterman says he has no interest.

"I don't want to be muzzled," he said. "If you're trying to solve a human rights issue, then asking you to give up more human rights to solve it isn't really something that is sensible to me… I just can't live with the idea of never discussing this further."

Buterman, who has since worked as a teacher in other areas, says he expects the Catholic school board will ask the Alberta Human Rights Commission to dismiss his complaint.

The Superintendent of the Catholic school district told CTV News on Sunday he stands by the letter, citing provincial standards.

An except of that document stated, "in discussions with the Archbishop of Edmonton Diocese, the teaching of the Catholic Church is that persons cannot change their gender. One's gender is considered what God created us to be."

The letter goes on to say, "your gender change is not aligned with the teachings of the Church and would create confusion and complexity with students and parents as a model and witness to Catholic faith values."

In an interview with the Canadian Press, David Keohane also said officials worked with the human rights commission to try to ensure Buterman was offered proper compensation. The commission has legal authority to throw out a case if a "fair and reasonable settlement" is put on the table.

"Everything is completely reasonable ... given the absolute nature of how the issue represented itself," said Keohane. "We believe that we have been abundantly fair."

The Alberta Teachers' Association seems to agree. The union has decided it will no longer pay for Buterman's lawyers because his legal counsel regards the cash offer as "substantial," saying it's more than most employers would offer a short-term employee.

"We believe that no board should discriminate on the basis of gender identity," said spokesperson Dennis Theobald. "That said, understand that, as a Catholic school board, Greater St. Albert may have a different view."

Buterman, who is also a political activist with the Trans Equality Society of Alberta, stresses his complaint isn't just about money.

For months he lobbied in favour of federal Bill C-389, which seeks to amend the Canadian Human Rights Act to prohibit discrimination on the basis of gender identity or gender expression. The bill passed third reading in Parliament earlier this year, but died in the Senate last month when the federal election was called.

Buterman says he won't give up the fight.

"I have a medical condition. It is diagnosed by medical professionals and like other medical conditions I've had, such as cancer, I've never really considered that an issue for my employer to be concerned with…I think it's deeply disturbing to suggest that any employer has any right to know what is underneath your clothes."

Buterman argues it's now his right to speak out against discrimination he experienced.

"People like us have all experienced job harassment, job discrimination, job loss — it is a common theme in the community," he said. "The only difference between me and everyone else is that I got mine in writing. I have no interest in pretending it didn't happen."

Back in 1988, the Edmonton Public School Board brought the controversy to the forefront when elementary teacher Carol Allan told her employers she was making the transition from a man to a woman.

The board forced her out of her classroom job while officials grappled with their next move. After the threat of legal action and a failed offer to buy out her contract, Allan was given a job teaching adults.

She was eventually allowed back into the elementary classroom and retired after 31 years as a teacher.

Allan celebrates Buterman's refusal to settle.

"Jan, fight the fight," she said. "Don't give in. Don't say ... ‘I'm not going to fight you. I'm going to be good and quiet and not talk about this. I won't bother you about this.' No, fight the fight."

More than 20 years after Allan's sex change, the Edmonton Public School Board is working to develop a policy to prevent harassment of and discrimination against lesbian, gay, bisexual, transsexual/ transgendered students and staff. The hope is to have directives in place by September.

With Files from the Canadian Press and Sean Amato