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LEGAL REPOR T: LABOUR & EMPLOYMENT employees. This left no incentive for companies to overfund the plans. When times are good, the plans are fund- ed appropriately, however, when the market goes down, plans can become underfunded. Kerry allows for companies to use surplus in plans for contribution holi- days and other plan expenses not spe- cifically prohibited in the plan language. Pension administrators can now use the extra money as a nest egg to fund plans in tough times. "Kerry is a decision, which is generally good for employers, but it is also in many ways good for the preservation of defined-benefit pension plans. As a stand-alone it is not going to save defined-benefit pension plans, but it is certainly something in the right direc- tion," says Frazer. "Now you actually have a use for this surplus money that employ- ers could take and use for their benefit and the benefit of keeping the costs for administering the plan more controlled, where before you had a scenario of 'Why would I fully fund the plan?'" Let us open right door for you the We specialize in Employment and Labour Law in Canada Kuretzky Vassos Henderson is a leading employment and labour law fi rm situated in the heart of Toronto. We are comprised of nine lawyers, all of whom specialize in the area of employment and labour law. We act for many prominent public and private sector employers as well as for individuals. Kuretzky Vassos Henderson LLP Our work includes extensive experience in the areas of: Wrongful dismissal • Human rights • Labour relations/Labour law/Collective barganing • Workplace health and safety • Sexual harassment • Employment standards • Employment contracts • Canada Labour Code • Class actions • Mediation/arbitration/ADR www.kuretzkyvassos.com • 416.865.0504 44 OC T O BER 2009 www. C ANADIAN Law ye rmag.com uretzky_CL_Feb_09.indd 1 7/23/09 10:38:03 AM www.mathewsdinsdale.com Frazer's comments may seem a far cry from those made by the appellant lawyer in Kerry, Ari Kaplan, a partner with Koskie Minsky LLP. Following the decision to deny the appeal, Kaplan told Canadian Lawyer it will "acceler- ate the shift from defined-benefit to defined-contribution pension plans." He characterized defined-contribution plans as basically RRSPs with no risk to employers, and employers would now be able to clean out DB plans leaving no cushion. Additionally, he says companies that shift away from DB plans to DC plans do so at the risk of employee loyalty. On this point, Frazer somewhat agrees, saying DB plans are better for employee loyalty and are traditionally used in workplaces that are more likely to take employees from cradle to grave. "Defined-benefit is more useful if you are going to be in one industry your entire life," says Frazer. "If you're a steelworker, if you are an autoworker, but many companies like retail and high-tech, people move around all the time. "Even now you look at all the com- panies that used to have defined-ben- efit plans, like The Bay, and Sears, and Canadian Tire, it's a different industry now. People move around all the time in those industries." Numbers are hard to come by. To read the full text of Nolan v. Kerry (Canada) Inc. visit scc. lexum.umontreal.ca/ en/2009/2009scc39/2009scc39.htm Statistics Canada holds such data, but has not reported since 2004. Considering the economy over the last five years, any speculation will only be a guess. What is known is in 1992, 91.5 per cent of public sector employees and 28.6 per cent of private sector employees had DB plans. Just 12 years later, the number dropped to 79 per cent of public employees and 20.5 per cent of private employees. In real numbers that meant emp l oyme n t o c c u pa t i o n a l h e a l t h a n d s a f e t y h uma n r i g h t s wo r k p l a c e s a f e - t y a n d i n s u r a n c e pa y e q u i t y immi g r a - t i o n emp l oyme n t o c c u pa t i o n a l h e a l t h a n d s a f e t y h uma n r i g h t s wo r k p l a c e s a f e t y a n d i n s u r a n c e pa y e q u i t y imm immi g r a t i o n emp l oyme n t o c c u pa t i o n - a l h e a l t h a n d s a f e t y h uma n r i g h t s wo r k p l a c e s a f e t y a n d i n s u r a n c e pa y First in Labour Law Since 1956 Toronto 416.862.8280 Sarnia 519.336.5447 Sault Ste.Marie 705.253.3711 Since being founded in 1956 as the Country's first labour relations and employment law firm, Mathews Dinsdale has been dedicated to helping employers manage the increasingly complex laws relating to the workplace. For over 50 years, our lawyers have played a significant role in shaping labour – management relations. Today, with offices in Toronto, Sarnia and Sault Ste. Marie, Mathews Dinsdale continues to have one of the Country's most highly regarded management labour and employment law practices. It continues to be our goal to help management manage – and succeed.