Manitoba union wins court case dispute over pension funds

Posted Feb 1, 2014 by Ken Hanly
The Canadian Supreme Court has upheld a decision by a lower court that a $43.3 million pension surplus that existed when the government-owned Manitoba Telephone System was privatized in 1997 "belonged to the workers and retirees and must be repaid".
Supreme Court of Canada
Supreme Court of Canada
Wiki Commons
Unifor, formerly Communications, Energy, and Paperworkers union Local number 7, along with the Telecommunication Employees Association of Manitoba, and the International Brotherhood of Electrical Workers (IBEW) and a group of retired MTS workers has been fighting the case since way back in 1997. In a news release Unifor representative Paul McKie said:
"Today the Supreme Court unanimously concluded that MTS wrongfully made use of the initial surplus as MTS received the full benefit of the surplus and the members received nothing, This is a great day and a long time coming for the unionized workers at MTS —a 17-year battle to wrestle back from a corporation, money that belonged to the workers," The Supreme Court has reinstated an earlier decision of a trial judge that the two parties negotiate the utilization of the pension funds and work out an agreeable implementation process or if that is not possible to submit further evidence so the court would make the decision.
The Court also ordered that all the legal costs would be paid out of the new plan trust fund so that all the legal costs incurred by the unions and others will be repaid.
The chief financial officer of the privatized company, MTS Allstream, Wayne Demky said: "This is a very disappointing outcome, but we were prepared for this scenario and are confident that should we need to make additional pension payments this year, we can fully manage its financial impact while maintaining our long-term strategy for delivering shareholder value," The company also said that it was reviewing with outside advisers the "complex" ruling noting that it would require further negotiations with the plaintiffs in the case before it was known what the exact impacts would be on the pension plan.
Nevertheless the company said benefits are expected to increase by $43 million plus interest at a rate derived from the return on the plan since 1997. The total increase could be up to $147 million.