Laid-off employees entitled to partial pension windup
This week’s Lawyers Weekly reports on Marino v. Hydro One Inc., a case recently decided by the Ontario Court of Appeal in which Howard Goldblatt won a partial pension windup for laid off employees.
The case concerned the interpretation of section 69(1)(d) of the Pension Benefits Act, which allows the Superintendent of Financial Services to require a full or partial windup of a pension plan if “a significant number of members of the pension plan cease to be employed by the employer as a result of the discontinuance of all or part of the business of the employer or as a result of the reorganization of the business of the employer.”
In 2002, a reorganization at Hydro One led to the layoff of 73 middle-management employees. They asked the Superintendent to order a partial windup, but the Superintendent refused on the basis that they did not constitute a “significant ” number of members of the plan.
The Financial Services Tribunal overturned the Superintendent’s decision, holding that the 73 laid off employees were among only 379 employees covered by a Management Compensation Plan. All of the other members of the plan were represented by trade unions and protected by collective agreements. The Tribunal held that, in determining whether the number of employees affected by the restructuring was “significant”, it was not required to consider that number against the overall membership of the plan, but could, in an appropriate case, measure them against a segregated subgroup of plan members. The Tribunal held that this was an appropriate case in which to do so, concluded that the number of affected employees was significant for the purposes of section 69(1)(d) (i.e. that 73 out of 379 management employees was a significant number) and ordered a partial windup.
The Divisional Court dismissed Hydro One’s appeal and Hydro One appealed to the Ontario Court of Appeal.
The Ontario Court of Appeal dismissed Hydro One’s appeal. It agreed with the Divisional Court that the Tribunal had correctly interpreted the Act and that the Tribunal’s application of the Act to the facts of the case was reasonable.