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ARTICLE · 28 FEBRUARY 2014

Pension Benefits Not Deductible From Wrongful Dismissal Damages

Miller Thomson
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On December 13, 2013, the Supreme Court of Canada released its much anticipated decision in "IBM Canada Limited v. Waterman" 2013 SCC 70.

CanadaEmployment and HR
Richard Truman
Richard Truman
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On December 13, 2013, the Supreme Court of Canada released its much anticipated decision in IBM Canada Limited v. Waterman 2013 SCC 70. The case confirms that employers may not deduct earned pension benefits from damages owed to wrongfully dismissed employees.

Mr. Waterman was an IBM employee with over 42 years of service. During that time, he had participated in the company's defined benefit pension plan. IBM terminated Mr. Waterman's employment in 2009. He was 65 years old at the time and was eligible to receive benefits under the plan. He was given two months notice.

Mr. Waterman brought an action for wrongful dismissal. The trial judge awarded a 20 month notice period and declined to deduct pension benefits received by Mr. Waterman during that period. IBM appealed. At the BC Court of Appeal and Supreme Court of Canada, IBM argued that Mr. Waterman was not entitled to receive both pension benefits and pay in lieu of notice. Otherwise, argued IBM, Mr. Waterman

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