Financial Services Tribunal & Pension Commission of Ontario Case Summaries/
Summaires des décisions du Tribunal des services financiers et de la Commission des régimes de retraite de l'Ontario

Case Name/nom du dossier:Navistar Canada Inc. v. Superintendent of Financial Services and Unifor (formerly CAW-Canada) and its Locals 127 and 35

Type/type:Pensions/Régime de retraite

Decision Date/Date de la décision:2014-07-11

Tribunal/tribunal:FST/TSF




Navistar Canada Inc. v. Superintendent of Financial Services and Unifor (formerly CAW-Canada) and its Locals 127 and 35

FST File No.: P-0521-2013

Date of decision: July 11, 2014

Panel Members: Florence Holden (Chair); Jeffrey Richardson; Patrick Longhurst

Parties to hearing: Navistar Canada Inc.; Superintendent of Financial Services; Unifor (formerly CAW-Canada) and its Locals 127 and 35

SUBJECT: PARTIAL WIND UP

CONSENT BENEFITS

CREDITED SERVICE

Summary

Navistar Canada Inc. (“Navistar”) carried on a truck assembly manufacturing operation in Chatham, Ontario. Its employees were members of Unifor and members of the Navistar Canada Inc. Non-Contributory Retirement Plan (the “Plan”).

Starting in mid 2008, Navistar’s U.S. parent began planning to move the Chatham operation to Mexico, in response to the economic downturn. Navistar posted layoff notices on November 5, 2008 (resulting in 470 Plan members being indefinitely laid off as of February 1, 2009 and never recalled) and on January 5, 2009 (resulting in 178 members being indefinitely laid off as of March 1, 2009 and never recalled). Finally, Navistar posted a notice of indefinite layoff for the remaining members still working in the plant as of April 2, 2009. These members were placed on indefinite layoff as of June 29, 2009.

The Superintendent issued a Notice of Intended Decision (the “NOID”) on March 7, 2013, intending to order a partial wind up of the Plan effective July 28, 2011 and covering all members who ceased to be employed from June 30, 2009 to the plant closure date. The NOID also ordered Navistar to pay Special Early Retirement (“SER”) benefits to members affected by the partial wind up and members who qualified for this benefit under the Plan as an ancillary benefit under section 1.03 of the Plan. Finally, the NOID ordered Navistar to credit all members who met the conditions with credited service under section 7.03(b)(iii) of the Plan if they met the conditions set out in that section.

Navistar requested a hearing. The hearing was held on April 11, 14, and 15, 2014.

The decision held that the scope of the partial wind up extended back to February 1, 2009, when the first significant lay-off notice became effective. Navistar clearly planned to close the Chatham facility and relocate to Mexico, and all of the events starting with the communications regarding this in mid 2008 could be regarded as one reorganization. It was not necessary to determine whether voluntary terminations should be included. Severance packages and releases were not relevant because these did not relate to pension benefits, and in any event a minimum statutory standard such as the right to be included in a partial wind up could not be waived.

The decision also held that the SER was a consent benefit even though it did not contain the specific word “consent”, and therefore members who otherwise met the conditions in the SER were entitled to it if they were affected by the partial wind up (pursuant to subsection 74(7) of the Pension Benefits Act) or if they were otherwise entitled to the SER as an ancillary benefit (pursuant to subsection 40(3) of the Pension Benefits Act).

The decision also held that all members who otherwise qualified under section 7.03(b)(iii) of the Plan were entitled to the credited service set out in that section, and rejected Navistar’s argument that a member was only entitled to the credited service if the member returned to work. This was only an alleged practice on the part of Navistar, the plan text was unambiguous, and even if it was ambiguous it should be interpreted in the members’ favour.

The panel directed the Superintendent to order a partial wind up of the Plan effective July 28, 2011. Navistar was directed to prepare and file a wind up report as soon as practicable that included all plan members who ceased to be employed between February 1, 2009 up to and including June 28, 2011. The report was also to credit all eligible members with credited service pursuant to section 7.03(b)(iii) of the Plan regardless of whether they returned to work, and to provide all eligible affected members with the SER benefit under section 1.03 of the Plan.

The panel ordered Navistar to provide proof to the Superintendent that the SER benefit and the credited service had been provided to all eligible members who were not affected by the partial wind up. In the case of deceased members, Navistar was to provide proof that this benefit and credit had been given or applied in favour of the deceased member’s beneficiary.

The panel remained seized of any implementation issues.

Cases cited: Imperial Oil Limited v. Ontario (Superintendent of Financial Services) (2002), 35 C.C.P.B. 221; Firestone Canada Inc. v. PCO, [1991] 1 O.R. (3d) 122; GenCorp Canada Inc. and Superintendent of Pensions for Ontario et al [1998] O.J. No. 961 (C.A.); Monsanto Canada Inc. v. Ontario (Superintendent of Financial Services) [2004] 3 S.C.R. 152; McDonnell Douglas Canada Ltd. Salaried Plan, May 19, 1999, XDEC-44 (PCO); Imperial Oil Ltd. v. Ontario (Superintendent of Financial Services) (2002), 35 C.C.P.B. 221; Stelco Inc. v. Ontario (Superintendent of Pensions), [1994] 115 D.L.R. (4) 437; Marino v. Ontario (Superintendent of Financial Services) (2007) 67 C.C.P.B. 51; affirmed Marino v. Ontario (Superintendent of Financial Services) (2008), 67 C.C.P.B. 86 (Ont. Div. Ct.); Imperial Oil Limited v. Ontario (Superintendent of Pensions) (1996) PCO Bulletin/Vol 6/Issue 4/page 90 (XDEC-34); CBS Canada Co. v. Ontario (Superintendent of Financial Services), 2003 ONFST 10; DelGrande v. Shoppers Drug Mart Inc. (2009) 79 C.C.P.B. 127; Marshall Steel Limited and Associated Companies and the Superintendent of Financial Services of Ontario, FST File No. P0150-2001; Atlantic Oil Workers Union, Local v. Imperial Oil Ltd., [2006] N.S.J. No. 337 (N.S.C.A.); IBM Canada Limited v. Waterman [2013] S.C.C. No. 70 (QL); National Automobile, Aerospace, Transportation and General Workers’ Union of Canada (CAW-Canada), Local 1451 v. Kitchener Frame Ltd. (2010) O.J. No. 3041 (Div. Ct.); André Provost v. Superintendent of Financial Services, May 31, 2012, FST Decision No. P0480-2011-1; York University Faculty Association v. Superintendent of Financial Services and York University and Canadian Union of Public Employees Local 3903 (2010 ONFST 11); Davenport v. Hudson’s Bay Company, (2006) O.J. No. 3623 (Sup. Ct.); McCreight v. 146919 Canada Ltd. (1991), 35 C.C.E.L. 282 (Ont. Gen. Div.); BICC Cables Canada Inc. v. Ontario (Superintendent of Financial Services) (2000), 26 C.C.P.B. 179; Caterpillar of Canada Ltd. Pension Plans for Hourly Rated and Bi-Weekly Employees, May 16, 1996, XDEC-33 (PCO)

This summary is offered as a public service and should not be relied upon as legal advice. Many factors unknown to us may affect the applicability of any statement or comment made in the summary to your particular circumstances.