Mr. Waterman worked for IBM (United Kingdom) and subsequently
IBM (Canada) for 42 years when he was dismissed without cause in
March of 2009 and was given 2 months of pay in lieu of notice.
Subsequently, he began collecting pension payments from the defined
pension plan. IBM had contributed a percentage of Mr.
Waterman's salary annually to the plan. Mr. Waterman had not
contributed financially to it.
Mr. Waterman brought a wrongful dismissal lawsuit. The British
Columbia (BC) Superior Court determined a reasonable notice period
of 20 months and ordered IBM to pay the 18 month balance. The BC
Superior Court did not deduct the pension payments that Mr.
Waterman had received. IBM appealed to the BC Court of Appeal and
argued the pension payments should have been deducted. The BC Court
of Appeal dismissed the appeal. In a further appeal to the
Supreme Court of Canada, IBM attempted to make the argument that
the full amount of the pension payments should be deducted from the
damages owed. The Supreme Court of Canada dismissed the appeal.
The Supreme Court of Canada found that the "private
insurance exception" applies to benefits such as pension
payments to which an employee had contributed and were not intended
to be an indemnity for the type of loss suffered as a result of
IBM's breach of the employment contract and therefore did not
need to be deducted from damages. The Court commented that a
retirement pension is not an indemnity for wage loss, but rather a
form of retirement savings. Interestingly, even though IBM
was the only financial contributor to Mr. Waterman's pension,
the Court still determined that Mr. Waterman had
"contributed" to the pension payments through his years
of service to the company.
This case supports the generally understood principle that
pension payments are not deductible from wrongful dismissal
damages. Read the decision.
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.
A former teacher at Bodwell High School has learned a valuable lesson from the B.C. Human Rights Tribunal— it is not discriminatory for an employer to offer child-related benefits to only employees with children.
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.
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