Last fall, in Nadolny v. Peel (Region), the Ontario Superior Court of Justice dismissed a motion for the certification of a class action. In that case, the cost of the post-retirement benefits was originally paid entirely by the retirees. Beginning in 2000, this was changed to a 50/50 cost-sharing arrangement between the employer and the retirees. In 2005, the employer realized that it was paying more than its 50% share of the plan costs due to an administrative error. The employer, therefore, began to progressively restore the 50/50 cost split.
Evidence showed that different documents had been sent to the various retirees, and that individual communications had taken place between the employer’s representatives and the retirees prior to their retirement. The court dismissed the retirees’ motion for leave, stating that an individual inquiry into each retiree’s situation would be needed to rule on the issues raised. In such a situation, a class action suit is not appropriate.
Until now, retirees have elected to use class actions to assert their rights with respect to post-retirement benefits. This has allowed them to institute claims on a collective basis that they may have had little incentive to pursue individually.
In the past, the courts have occasionally noted that class actions are particularly appropriate for resolving challenges to an employer’s reduction of retiree benefits. However, in the Nadolny case, the Court stated that authorization to institute a class action will not automatically be granted simply because the matter involves post-retirement benefits.
Future developments in the Quebec proceedings and the Acreman case will be interesting to follow. Both may lead to judgments on the merits of the issues raised. BC
Josée Dumoulin is a lawyer with Lavery, de Billy, S.E.N.C.R.L. in Montreal.
jdumoulin@lavery.ca
> click here for a PDF version of this article
© Copyright 2010 Rogers Publishing Ltd. This article first appeared in the May 2010 edition of BENEFITS CANADA magazine.