2013 Pension and Benefits Class Action Update
As many Canadian employers continue to amend the terms of pension and benefit plans, class action proceedings continue to be brought by current and former employees. While more actions are ongoing than are described here, the following are some of 2013’s more notable matters.
In July 2013 the Ontario Superior Court released its decision in O’Neil v. GM. The Court determined that an employer may modify benefits after retirement only where the contractual language clearly grants such a right. In this case, it was determined that the benefit plan terms were not sufficiently clear to allow post-retirement benefit amendments.
On January 16, 2014 the Supreme Court of Canada released its decision in Vivendi Canada Inc. v. Dell'Aniello, allowing certification of the class action and confirming that a class proceeding may be authorized where there is a significant and identical, related or similar question of law or fact to be determined. A common answer to the question is not required, just a common question. This litigation addresses the issue of a unilateral change to a health insurance plan benefiting retirees and their surviving spouses.
In Scott v. Canada A motion to dismiss brought by the Attorney General was denied in September. This class action is receiving media attention as it concerns disabled veterans seeking to block a reduction of post-retirement benefits. A certification application is now expected to proceed in the near future.
The trustees of the Eastern Canada Car Carriers Pension Plan are responding to allegations of negligence or breach of trust in granting early retirement benefits for a period of over six years while the plan was underfunded. The class proceeding was certified by the Ontario Superior Court in June 2013 and is now moving towards trial.
2013 also saw a few notable settlements and settlement attempts. Shaw Group Inc. settled for $9.2 million with respect to a claim for damages brought by former employees resulting from the Shaw Canada Pension Plan being underfunded. The settlement was approved by the Ontario Superior Court on October 9, 2013.
Canada Life Assurance Company agreed to a settlement with Plaintiffs in a class action brought to determine the ownership of plan surpluses and to seek damages for alleged breaches of the plan. However, the parties were surprised when the Court rejected the settlement and deemed it unfair to some class members. While it is not unusual for some class members to object to a settlement, the Court made it clear that it would not approve what it considered an unfair settlement.
certification class action