Ontario court rules employer not obligated to preserve past service benefits

By: Julius Melnitzer | July 16, 2024

Ontario’s Small Claims Court has ruled that an employer’s letter, which described the benefits coverage that would exist following a divestment as ‘comparable’ to prior levels of coverage, didn’t create a contractual obligation to preserve past service benefits.

“The decision makes a clear distinction between an informational announcement or other general information that is not an unequivocal promise,” says Randy Bauslaugh, a partner at Bauslaugh Pensions & Benefits Law and who wasn’t involved in the case. “That’s good news for plan administrators who are frequently concerned that statements in plan booklets and announcements could be taken as contractual commitments.”

More particularly, Deputy Judge Dennis Ong’s reasons in Kreppner v. Ontario noted the absence of any collective or individual agreement dealing with the issue.

“The so-called ‘promise’ to provide a comparable plan didn’t reference the past or preserve the value of accrued [pension] benefits and seemed to be, on the facts of this case, merely predictions or possibilities,” Ong stated.

The case originated . . . MORE

Julius Melnitzer is a Toronto-based legal affairs writer, ghostwriter, writing coach and media trainer. Readers can reach him at [email protected] or https://legalwriter.net/contact.

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