The case, Elaine Nolan, et al. v. Kerry (Canada) Inc. et al., will be watched closely by unions and employers alike
Ottawa (4 September 2008) – The Canadian Labour Congress (CLC) has been granted leave to intervene at the Supreme Court of Canada in the case which asks the Court to determine the appropriate conduct of employers managing employee pension funds. Specifically the Court is being asked to provide guidance on whether pension plan expenses can be paid for by a pension fund and when surplus pension funds can be used to satisfy a company’s contribution obligations.
The case, Elaine Nolan, et al. v. Kerry (Canada) Inc. et al., will be watched closely by unions and employers alike.
In June 2007, the Ontario Court of Appeal concluded that an employer sponsor could stop paying the pension plan expenses in favour of having them paid directly from the pension fund if there was no explicit prohibition in the plan trust preventing such payment. The Appeal court also ruled that the employer was not responsible to pay the amounts that it had taken from the fund through the contribution holidays.
This case will be watched very closely by the labour movement and the business community. The eventual outcome will have implications which reach much further than this particular case, such as other employers that have been conducting similar practices of using pension funds to pay for the administration of a pension plan.
The appeal is expected to be heard by Supreme Court in November of this year.