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"This case certainly adds fuel to the fire. If you're acting for a seller you don't want to be hit with that liability." Newton says sellers who know that a buyer doesn't have a DB plan or who have a less generous plan should try to insist the buyer offer the same pension plan for one or two years during a transition period. "What I suggest is an escrow account so the seller can put some money in there to account for these potential liabilities," he says. The case is one all companies need to be mindful of, says Susan Nickerson, partner in the pension and benefits group at Hicks Morley Hamilton Stewart Storie LLP. "The concept of being in a pension loss on a transaction is something that needs attention to ensure the vendor is protected," says Nickerson. "Technically there is a termination of employment on the day of a sale and the person is rehired by the purchaser, but there is still a termination event, which gives rise to reasonable notice. However it is usually mitigated fully by the offers being made by the purchaser. You wouldn't want to go into a transaction without considering that because then you're at risk. If there is an action taken by the employees it will be against the vendor and then they claim against the purchaser on the indemnity." Nickerson says a pension plan member employed in Ontario who is terminated involuntarily, without cause, and the sum of whose age and service is 55 or more (55 points) must be provided with "grow-in" to the plan's early retirement subsidies. As of July 1, 2012, a new set of "grow-in rules" applied in Ontario. "When there is an involuntary termination of employment the employee would be given rights to grow into early retirement benefits, so the value of their pension would include the value of the early Read the Kerfoot v. Weyerhaeuser Company Ltd. decision at canlii.ca/t/fr6r8. Ball Professional Corporation CANADIAN EMPLOYMENT LAW STACEY REGINALD BALL Excellence in Employment & Labour Law MORE THAN 6,145 CASES CITED Canadian Employment Law is a one-stop reference that provides a thorough survey of the law and analysis of developing trends, suggesting potential avenues of attack as well as identifying potential weaknesses in the law. Canadian Employment Law has been cited by the Supreme Court of Canada, in superior courts in every province in Canada and is used in law schools throughout Canada. • Counsel in Leading Cases • • Author of Leading Treatise • Wrongful Dismissal Employment Law Human Rights ORDER# 804218-62303 $365 804218-62303 2 volume looseleaf Post Employment Competition supplements per year Supplements invoiced separately 0-88804-218-3 Civil Litigation CD-ROM or Internet version available separately Prices start at $4 Disability Appellate Advocacy Referrals on behalf of employees and employers respected AVAILABLE RISK-FREE FOR 30 DAYS Order online at www.ca .c Call Toll-Free: 1-800-387-5164 In Toronto: 416-609-3800 Shipping and handling are extra. Price subject to change without notice and subject to applicable taxes. CANADA LAW BOOK® retirement subsidies if they met age and service of 55 points." Newton also takes issue with the way Kerfoot was handled by the courts. "I just don't think it's practical for courts to be digging into this amount of detail where you simply take the notice period of every employee that came over and calculate the pension they would have earned under the seller's plan and compare it to what they earned under the buyer's plan and come out with the difference," he says. "It's just not practical because if the warranty is there employees are gong to be employees on substantially similar terms. We shouldn't have to drill down to each and every benefit and compare the two." But the actuaries may be getting more work in the future as companies look to shed long-term liability associated with hefty DB pension plans. "With the aging workforce and more people being terminated before they reach 65 these claims have become more prevalent," says Shields. 82 Scollard Street, Toronto, Canada, M5R 1G2 Contact Stacey Ball at (416) 921-7997 ext. 225 or srball@82scollard.com web: www.staceyball.com www.CANADIAN arswell-26372_CL_Feb_13.indd 1 all_CL_Mar_12.indd 1 13-01-15 10:02 AM L a w ye r m a g . c o m F e b r uary 2013 45 12-03-13 2:27 PM

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