People Mentioned
Partner, Disputes, Toronto
Representing IBM Canada Ltd. before the Ontario Superior Court of Justice, Osler’s David Stamp, a partner in the Litigation group, won a case that clarifies the specific test that the law requires to determine the rectification of a pension plan or other unilateral instrument. Reporting for Benefits Canada, Julius Melnitzer interviewed David about the ruling and what it means.
IBM wanted to alter its pension plan to address drafting errors that created unintended additional benefits for some employees.
Stamp argued that the pension plan was a unilateral instrument in part because the company established it in 1947 without consulting employees, that the drafting error was made when the company was reacting to a legislative change and that IBM had always reserved the right to amend or discontinue the plan. Additionally, the company’s true objective of fixing errors was, as the court recognized, “objectively manifested.”
While IBM did negotiate and settle with 210 former and current employees who were affected by the rectification, David explained those actions had no effect on the test.
“Even where there is a settlement with affected members, it remains necessary to satisfy the court that the test for rectification is met on the merits,” he said.
David added that the process IBM undertook is likely to be seen as a model for other businesses and organizations in analogous circumstances.
“The case could serve as a helpful precedent for settling similar cases, particularly with regard to the mechanics of negotiating a settlement with Court-appointed representatives of affected plan members and coordinating with [the Financial Services Regulatory Authority of Ontario].”
The full article can be read on the Benefits Canada website.
People Mentioned
Partner, Disputes, Toronto
