On June 21, 2011, in Canadian Jewish Congress v. Polger,
the Court of Appeal of Québec overturned a decision of the
Superior Court that had ordered an employer to pay pension benefits
based only on an alleged practice and without proper written
documentation to that effect. The pension benefits in this case
were deemed to be gratuitous payments only, not required to be paid
to all departing employees by virtue of policy or practice.
Polger and Smajovits had worked for the Canadian Jewish Congress
for 36 and 22 years respectively when they were dismissed following
a reorganization. Not surprisingly, they sued for termination pay.
They included in their action a claim for supplemental pension
benefits that they said were not provided in their defined
contribution pension plan.
Polger and Smajovits argued that the employer had an unwritten
policy of supplementing its employees' pension plan either by
making special contributions to their pension fund or by paying
them additional pensions upon retirement. They argued that the
policy flowed from a long-standing practice which resulted in a
hybrid pension plan - allowing retiring employees who were the
beneficiaries of a defined contribution plan to receive a
supplementary pension for a total annual pension amounting to 2% of
their average annual salary over the last five years of service for
each year of service. These were the supplementary benefits they
argued they were entitled to.
The Trial Judge Decision
The trial judge agreed. The judge said the employer's
practice of pension enhancement became binding upon termination. On
that basis, the judge order the employer to pay Polger and
Smajovits $2,030 per month and $4,582 per month respectively, for
the rest of their lives – amounting to potentially
millions of dollars.
The Court of Appeal Decision
The employer appealed. The Court of Appeal agreed with the
employer and overturned the trial decision. In doing so, the Court
of Appeal did not agree that the evidence supported there being a
binding policy or practice that would warrant the payment of
pensions calculated according to the defined benefit "2%
formula". In the view of the Court of Appeal, all that the
evidence showed was that gratuitous payments in a variety of forms
were made over the years to a certain number of employees upon
request only and following a decision by the Board of Directors or
by management on a case by case basis. There was no general,
uniform and established practice of granting employees additional
pension advantages. Certainly, the evidence did not establish that
the employer ever agreed, directly or indirectly, to transform the
defined contribution pension plan offered to its Quebec employees
into a defined benefit pension plan or to remedy, systematically,
its perceived inadequacies.
Employers Must Nevertheless Protect Themselves
Although the Court of Appeal's decision comes as a relief to
employers who may on a case by case basis offer more generous
benefits to certain employees, employers must protect themselves
when they do so. In such cases, employers across the country must
make it clear that such benefits are paid on a gratuitous basis
only and not commit themselves to providing those benefits in the
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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