Beware Of Hidden Pension Liabilities In Corporate Transactions

In a recent court case in British Columbia, employees who transferred employment as part of a corporate transaction were awarded monetary damages on account of lost pension benefits: Kerfoot v. Weyerhaeuser Company 2012 BCSC 640.

Weyerhaeuser Company ("Weyerhaeuser") sold its interest in a pulp mill in Kamloops, British Columbia, to Domtar Corporation ("Domtar"). A full six-and-a-half months prior to the sale, Weyerhaeuser provided notice to its employees of the pending deal. As part of the sale, Weyerhaeuser's employees would be provided with offers of employment by Domtar. The salary of the employees was to remain unchanged, however, the pension benefits provided by Domtar were not as generous as those provided by Weyerhaeuser.