Canadian Labour Reporter

7 Canadian HR Reporter, a Thomson Reuters business 2014 CANADIAN LABOUR REPORTER increases to be granted in a given year, the in- creases are carried forward to future years and will be paid when the plan is in surplus. According to Herb John, president of the Na- tional Pensioners Federation, the move could set a dangerous precedent. "To take pensions or benefits away from people who have already retired is an abso- lute breach of public trust," John said. "When somebody retires it's totally unfair to change the rules of the game after the fact. After people retire their ability to generate income is either non-existent or minimal, at best, so the only protection they have against inflation is a cost of living increase." Thousands of pensioners felt the same way, organizing protests and eventually forming Pen- sion Coalition NB. On June 30, Ari Kaplan — a partner at the Toronto-based Koskie Minsky LLP and the law- yer representing the pension coalition — filed an application against the province. "Any employer that revokes a contract is subject to a lawsuit for damages," Kaplan said. "In this case, the employer is the government. A private employer does not have the right to reduce pensions, whereas a government can pass legislation. So the legislation did what no private employer can do contractually." The Pension Plan for Certain Bargaining Employees of New Brunswick Hospitals, the Pension Plan for Canadian Union of Public Employees of N.B. Hospitals, the Members' Pension Act, the Members' Superannuation Act and the New Brunswick Pipes Trades Pension Plan were all affected by the changes. Constitutional right to collective bargaining In addition to revoking the cost of living in- crease, Kaplan said, the government simulta- neously insulated itself from any lawsuit to seek damages for the unlawful breach of contract. "The Canadian constitution recognizes a constitutional right to collective bargaining, and in this case the government excluded all collective bargaining on this subject and legis- lated away the benefit," Kaplan said. "We're asking for the court to recognize there's a constitutional right of an older person to a security for their livelihood as they plan and budget for the end of their lives by prevent- ing an arbitrary and unilateral reduction in their benefits." The case was heard in a Fredericton court- room on Sept. 29, where the province's law- yer Steve Hutchinson argued the pensioners launched inappropriate legal action by filing an application. Unlike a legal action, an appli- cation relies solely on affidavits and an agreed statement of facts. According to Hutchinson, there is no agree- ment between the two parties on a statement of facts. The judge was asked to dismiss the case. Instead, the judge reserved his decision and a ruling is expected within the next few months. In the interim, many pensioners and cur- rent public service employees hope the newly elected Liberal government will take a different approach. "I think what the government's trying to do is eliminate the case entirely or drag it out even longer" said Steve Hindle, vice-president for the Professional Institute of the Public Service of Canada (PIPSC). "The Liberals, under Brian Gallant, did say during the campaign that they think people got a raw deal and they would like to invite people back to the table to have a dis- cussion about what would be appropriate in terms of changes to the pension plan." PIPSC represents approximately 1,300 pro- vincial and federal employees in the province. And with some 55,000 members across Cana- da's public sector, the union is very aware that many outside New Brunswick are keeping just as close an eye on the case. For instance, the government of Quebec is considering changing its municipal defined benefit pension plans to a shared-risk structure while the federal government has also shown an interest in a shared-risk pension plan. The shared-risk model in New Brunswick falls under the broader category of pension re- form called a Target Benefit Plan. A modified form of the defined benefit plan, the target ben- efit plan allows reductions in earned benefits that are applied retroactively. "This case could be helpful for other gov- ernments to know what the constitutional limits are on passing legislation that would al- low a private employer or a public employer to revoke an earned pension benefit, especially when the pension is in the process of being paid," Kaplan said. "We're not talking about active employees here. We're talking about people that have already finished their employ- ment and are retired." news Photo: Reuters photographer Unfair to change rules after retirement: Pensioners < from pg. 1 The pension plan for Certain Bargaining Employees of New Brunswick Hospitals, the pension plan for the CUPE of NB Hos- pitals, the Members' Pension Act, the Members' Superannuation Act and the New Brunswick Pipes Trades Pension Plan were all affected by the provincial govern- ment's switch to a shared-risk model.

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