In a recent decision, the Ontario
Court of Appeal (the Court) upheld a motion judge's
interpretation of the plain meaning of the pension documents and
denied a former employee's claim to an unreduced pension at
Mr. Creber, a senior VP and CFO of Revios Canada Ltd. (the
Company), was terminated in 2006 at age 52. While employed by the
Company, Mr. Creber was a member of its registered pension plan
(the Plan) and Executive Supplementary Pension Agreement (the
ESPA). The Company started an action in which it sought a
declaration that Mr. Creber was not entitled to an unreduced
pension at 62 under either the Plan or the ESPA. Mr. Creber
defended the action and counter claimed for the benefit. The motion
judge granted the declaration and M. Creber appealed. Mr. Creber
argued that the provision of the ESPA which provided an unreduced
pension at 62 to employees who had taken "early
retirement" applied to him, even though under the Plan he
was only eligible for a deferred pension (which he could have
started receiving at 55). Mr. Creber advanced that, as
"early retirement" was not defined in either the
Plan or the ESPA, his right under the Plan to receive his deferred
pension before the "normal retirement date" of
65, created another "early retirement date", in
addition to the right to retire at age 62.
In rejecting Mr. Creber's interpretation of the Plan and
ESPA, the Court decided that the various provisions of pension plan
documents must not be interpreted in isolation, but in a manner
that takes the entire agreement into account. The Court noted that
the ESPA by it very name is supplementary to the Plan and is thus
to be read in conjunction with the Plan which is the
"principal pension document". Starting its
analysis with the Plan, the Court ruled that at 52, Mr. Creber was
not eligible for retirement under the Plan; rather the Plan
provided him with a deferred pension commencing when he turned 65,
or an actuarially equivalent pension starting at age 55 or later.
As Mr. Creber was not entitled to an unreduced pension at 62 under
the Plan, the Court ruled that he was similarly ineligible under
the ESPA; in giving the same meaning to "early
retirement" in both Plan and ESPA, the Court concluded
that the ESPA was not intended to create a right to retire which
did not exist under the Plan.
Supplementary pension arrangements should be drafted
unambiguously and should be clearly subordinated to the registered
pension plan text. Absent ambiguity, Courts will look at the plain
meaning of pension documents and interpret both the supplementary
plan and the registered plan together.
Revios is a helpful case for employers in that it stands for the
proposition that supplementary pension plans should be subordinate
to and read together with the underlying registered pension
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Unfortunately, reasonable accommodation for employees in the workplace continues to be the source of significant litigation and even today we continue to see outrageous examples of employers behaving badly.
We are now beginning to see reported cases involving charges and subsequent fines laid against employers for failing to provide information, instruction and supervision to protect a worker from workplace violence.
On October 13, 2016, the Supreme Court of Canada denied leave to appeal an Ontario Court of Appeal decision which ordered an employer to pay a former employee 37 months of salary and benefits following termination.
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