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Supreme Court rules pension surplus belongs to workers and retirees

Unifor, TEAM, IBEW and retirees win Supreme Court appeal

WINNIPEG, Jan. 30, 2014 /CNW/ - In a decision today, the Supreme Court of Canada upheld a lower court ruling that the pension surplus of $43.3-million from employee contributions that existed when the former Manitoba Telephone System (MTS) was privatized in 1997, belonged to the workers and retirees, and must be repaid.

Unifor (formerly the Communications, Energy and Paperworkers union) Local 7 has been fighting this case, along with the Telecommunication Employees Association of Manitoba Inc. (TEAM), the International Brotherhood of Electrical Workers (IBEW) and a group of retirees, since 1997.

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," said Paul McKie, Unifor National Representative. "Many people in the three unions, the retiree's group, our legal team, worked tirelessly to get justice for our MTS members and their pension," said McKie.

The Supreme Court of Canada has reinstated the decision of the trial judge, where the judge ordered that the parties negotiate utilization of the funds and arrive at a mutually agreeable implementation process, and if necessary, submit further evidence and/or submissions to the court for determination of utilization of the funds and the implementation process.

The Supreme Court of Canada further ordered that costs throughout the proceedings shall be paid on a solicitor and client basis out of the new plan trust fund, meaning all legal costs incurred by the unions shall be repaid.

"This decision is a strong indication from the highest court in the country that pension surpluses cannot be used as corporate slush funds," said Jerry Dias. "It reinforces the idea that pensions are a deferred wage, agreed to as part of a contract promised to the worker for their efforts."

SOURCE Unifor the union