Class action challenging cuts to retiree benefits succeeds!
On July 17, 2013, the Ontario Superior Court of Justice found in favour of most of the members of a class action commenced against General Motors of Canada Ltd.
The class action was brought on behalf of salaried and executive retirees of General Motors who alleged that General Motors had improperly reduced and eliminated to their post-retirement benefits. The class action was certified on consent in 2011 and the case proceeded to a motion for summary judgment in May 2013.
The court agreed with the plaintiff that General Motors was contractually obligated to provide the promised benefits to former salaried employees, and had breached those contracts by reducing and eliminating the benefits. However, the court also found that General Motors was permitted to reduce the benefits of a smaller number of executive retirees on the basis that their contracts contained different language.
In the Toronto Star’s report on the case, Steven Barrett says that the decision “is potentially precedent-setting”. “It’s a very positive outcome for them and for any Canadian workers who’ve been promised retirement benefits and after they retire, the employer tries to reduce them or eliminate them.”