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Canada: Top court will hear pension case,

Judges to tackle who gets surplus

By James Daw, Toronto Star


 June 6, 2003

Toronto - The hot topic of whether pension surpluses should be divided at the time of mass layoffs is headed to the Supreme Court of Canada.

The highest court in the land agreed yesterday to hear an appeal in a widely watched case involving 146 former employees of Monsanto Canada Inc.

Six judges with two lower courts have already ruled unanimously that Ontario law requires companies to pay a share of any surplus that might exist at the time of a mass layoff.

Monsanto and the Association of Canadian Pension Management will now get one more chance to argue the law should be interpreted differently.

The issue of how to treat surplus pension funds has become hotter the farther that pension funds have fallen into a deficit position during the last three years of stock-market losses.

Thousands of Ontario workers formerly employed by 200 other companies had stood to benefit from earlier Monsanto rulings by the Divisional Court of the Ontario Superior Court of Justice and the Appeal Court of Ontario.

Hopes were dashed last year when the province proposed legislation that would have made workers wait to share in any surplus if the entire pension plan were ever wound up. But the election-bound Tory government backed down under intense pressure. Finance Minister Janet Ecker announced last November that new legislation would be introduced after more consultation.

Priscilla Healy, chair of the pension management association's advocacy and government relations committee, said the law as interpreted by the courts would pit the interests of former employees against those of active employees and retirees.

"We are calling on Ontario to enact remedial legislation similar to B.C., Alberta and Quebec as soon as possible to ensure that the `dog-eat-dog' disease doesn't threaten their employees and their pensioners," she said in a news release.

Lawyer Mark Zigler of Koskie Minsky said the Supreme Court is not commenting on the merits of Monsanto's case by granting an appeal. He predicted the Tories will be as happy as Monsanto about a further delay of about a year to hear the case, and longer until a judgment is rendered.

"It gets the government off the hook until the case is heard, and certainly until the election."

He expects to seek intervener status for former employees of National Trust Co. who want a share of pension surplus.

Monsanto sold the operations that employed the 146 workers who are seeking a share of about $19.1 million in surplus.

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