Employee retired day before new package approved

Retirement package was part of new collective agreement being negotiated when employee set retirement date
|Canadian Employment Law Today|Last Updated: 01/08/2014

An Ontario worker who changed her retirement date is not entitled to a retirement package that was approved the day after she retired, an arbitrator has ruled.

Pat Lake worked for Weetabix of Canada, a breakfast cereal manufacturer based in Cobourg, Ont. Lake joined Weetabix as a full-time employee on Oct. 1, 1995, but, by 2012, personal health issues were taking a toll. These issues led to her decision to retire.

On Sept. 10, 2012, Lake submitted a written notice of her intention to retire effective Oct. 26 — two days before she would be getting married. A month later, Lake’s mother told her she would be arriving for the wedding on Oct. 25 and asked to be picked up at the airport. Lake made a request to Weetabix’s HR manager to take Oct. 24 through 26 off.

The HR manager suggested that, since Lake was requesting three days off in her final week of work, Lake should move her retirement date up a week to Oct. 19. Lake agreed and the change was made.

Meanwhile, Weetabix and the union were negotiating a new collective agreement. One of the issues under discussion was an exit package for people considering retirement. Though it had been discussed for some time, there was no timetable for when it would be finalized. On Oct. 11, Weetabix’s training co-ordinator asked Lake if she was sure she wanted to retire before the new collective agreement was ratified, since it might include a new exit package, but Lake stuck to her request to retire on Oct. 19. Lake denied being told any information about the pending agreement.

A tentative agreement was reached a few days later and a ratification vote was announced on Oct. 17. The new collective agreement was approved on Oct. 20, the day after Lake retired. The agreement included an exit arrangement that allowed a certain number of senior employees to resign and receive monetary packages.

Lake called Weetabix a few weeks later to ask if she qualified for the exit package and the company told her she did not. The union filed a grievance claiming Lake should be entitled to the package because her original retirement date was after the ratification and Weetabix should have informed her — in good faith and honesty — of the pending new package before moving up her retirement date.

The arbitrator found that as of Oct. 11, when Lake agreed to move up her retirement date, there was no final agreement and no agreement on the terms of the exit package. Though the HR manager was aware of the negotiations, there was no indication it would be in effect anytime soon and Weetabix had no obligation “to disclose to individual employees matters which remain under discussion in the collective bargaining process.”

The arbitrator found there was no evidence Weetabix deliberately caused Lake to move her retirement to a date where she wouldn’t be eligible for the exit package. Since it was unknown when it would be ratified, it was just as likely it could have come into effect the day after Lake’s original retirement date, which would have put Lake in the same position, said the arbitrator. The grievance was dismissed. See Weetabix of Canada Ltd. and UFCW-Can, Local 175 (Lake), Re, 2013 CarswellOnt 15516 (Ont. Arb. Bd.).