Arbitrator Considers Employer's Ability To Collectively Bargain Changes To Retiree Benefits

In TRW Canada Ltd. and Thompson Products Employees' Assn. (Retiree Benefits) (Re), collectively bargained changes to vested retiree benefits were found to have been made without lawful authority.

The changes had been proposed by the employees' association ("Association"), following a particularly hard round of collective bargaining, and after the employer threatened to close one of its plants if it did not obtain a "competitive labour agreement". The changes included the elimination of retiree semi-private coverage, the elimination of retiree life insurance, and the introduction of a retiree co-pay obligation. However, from the outset of collective bargaining, the Association asserted that it did not believe that the employer had the legal right or ability to reduce or eliminate the retiree benefits listed in the collective agreement. The Association later filed two grievances on behalf of an individual retiree and on behalf of all other retirees of the employer