legal words
Pension Income not
Equated to Severance Pay
EMPLOYEE PENSION INCOME DOES NOT REDUCE EMPLOYERS’
OBLIGATION TO PROVIDE SEVERANCE FOR TERMINATED EMPLOYEES
When the Supreme Court of Canada speaks, the en-tire
country listens. Although employment law cases
rarely reach Canada’s highest court, every few years or
so, an employment law case will reach the Supreme
Court and the case will have national implications for decades to
come. This was true in the 1990s, with landmark employment law
cases such as Machtinger v. HOJ Industries Ltd. (1992) and Wallace
v. United Grain Growers Ltd (1997) and in the 2000s with cases
such as the 2008 decision of Honda Canada Inc. v. Keays and, most
recently, in IBM Canada Limited v. Waterman (“Waterman”) which
was released by the court on December 14, 2013.
In particular, this article will address what happened in
Waterman and describe how a majority of the Supreme Court de-termined
that pension benefits received by employees following
the termination of employment do not constitute alternate em-ployment
income that can be deducted from an employers’ liability
to pay wrongful dismissal damages. There are some practical im-plications
that Waterman will have on employers both now and
By R. Mark Fletcher and Jeff C. Hopkins
Photo by Edwin Verin / Shutterstock
HRPATODAY.CA ❚ MAY/JUNE 2014 ❚ 17