Pensions, Benefits & Executive Compensation Newsletter ' June 2021

• Published date: 15 June 2021
• Subject Matter: Employment and HR, Retirement, Superannuation & Pensions, Employee Benefits & Compensation, Employee Rights/ Labour Relations
• Law Firm: Blake, Cassels & Graydon LLP
• Author: Blake, Cassels & Graydon LLP

Welcome to the 30^th issue of the Blakes Pensions Newsletter. This newsletter provides a summary of recent jurisprudential developments that affect pensions and is not intended to be legal advice.

For additional information or to discuss how any aspect of these developments may affect you, please contact a member of the Blakes Pensions, Benefits & Executive Compensation group.

IN THIS ISSUE

EQUALITY RIGHTS

• Re OPSEU and Ontario (Minister of Government & Consumer Services), 2021 CanLII 19542 (ON GSB)
• Kynoch v. Board of Education of School District No 58 (Nicola-Similkameen), 2021 BCHRT 45

PENSION PLAN ADMINISTRATION

• McHayle v. Ontario (CEO of FSRA) 2021 ONFST 2

FAMILY LAW

• Armbruster v. Barrett, 2020 SKCA 140
• Jeske v. Jeske, 2021 ABQB 58
• Carvalho v. Amorim, 2021 ONSC 2940

EQUALITY RIGHTS

Re OPSEU and Ontario (Minister of Government & Consumer Services), 2021 CanLII 19542 (ON GSB)

Under collective agreements between the union (Union) and the employer (Employer), active employees were required to pay one half of the pension contribution under the Union's pension plan (the Plan), which was matched by the Employer. Prior to the 2015-2017 renewal collective agreement, there was a special exemption for disabled employees who were receiving or were qualified to receive benefits under the Long-Term Insurance Plan (the LTIP). The LTIP provided 66 2/3 per cent of an employee's annual salary amount until the age of 65, provided the employee remained 'totally disabled'. Under this exemption, the Employer paid the entire pension contribution for those eligible for LTIP payments. In the absence of an exemption, an LTIP employee would have been required to contribute approximately 10 per cent of his or her pensionable earnings to fulfill the employee's share of the pension contribution. However, provisions (the Impugned Provisions) in the 2015-2017 renewal collective agreement between the Union and Employer created an exception to the LTIP exemption ' where an employee had a minimum of 30 years of credit and was eligible to retire and receive an actuarially unreduced pension, the employee must pay his or her portion of employee contributions if he or she did not retire but elected to continue to accrue benefits.

Under the Plan, an employee was entitled to receive an unreduced pension upon retiring at the age of 65. An employee could retire early and still receive an unreduced pension if he/she met one of three eligibility tests: (1) eligibility for a disability pension (which required the employee to have more than 10 years of service, be considered 'totally and permanently disabled', and terminate employment); (2) eligibility under Factor 60/20 (which required the employee to be at least 60 years old and have at least 20 years of pension credit); or (3) eligibility under Factor 90 (which required the employee's age plus years of pension credit to total at least 90).

The Union argued that the Impugned Provisions created a discriminatory adverse impact on LTIP employees who were between ages 54 (the minimum age to be eligible under Factor 90 with 30 years of pension credit) and 65 (the age at which LTIP benefits ceased). The Union argued that this violated the protection against age discrimination under section 15(1) of the Charter of Rights and Freedoms (Charter) and section 5(1) of the Ontario Human Rights Code (Code). The Impugned Provisions forced affected employees to choose between retiring early despite still being eligible for LTIP, or paying their share of the pension contribution.

The Employer argued that the Impugned Provisions were the result of agreement in collective bargaining. Any distinction made was based on the amount of pension credit, not based on age. The Employer also argued that the impacted employees were not deprived of their choice. The LTIP employees could choose to (i) stay on LTIP and pay the employee share of their pension contribution (and suffer a financial burden), (ii) stay on LTIP without paying their pension contribution (and suffer a freezing of their pension credit status), or (iii) take the option of early retirement (and suffer the loss of LTIP benefits). Furthermore, the Employer argued that the LTIP employees were simply losing access to a special benefit that was not available to non-LTIP employees, as employees on other forms of leave were required to continue pension contributions in order to continue pension accruals.

The Ontario Grievance Settlement Board (Board) found that the Impugned Provisions were indeed in violation of the equality protections in the Charter and the Code. The fact that the Impugned Provisions were agreed to by both the Employer and the Union did not make the bargain Charter-compliant, as the parties are not permitted to contract out of the...