In May, we wrote a blog on the British Columbia Court of Appeal’s decision in Lacey v. Weyerhaeuser Company Limited (Set “For Life” – Communications put employer “On the Hook” for retiree benefits costs). In that case, the issue was whether the employer could unilaterally reduce its share of premiums for its retirees’ health plans. Based largely on communications from the employer that the costs would be covered throughout retirement, the Court of Appeal held that the employer was not entitled to reduce those benefits.
The employer sought leave to appeal the decision to the Supreme Court of Appeal. The Supreme Court of Canada issued its decision to deny leave to appeal. The SCC did so without providing reasons, as is normally the case.
With or without the SCC weighing in on the matter, the message from Lacey v. Weyerhaeuser is clear: where an employer intends to reserve its right to amend or reduce retiree benefits, it must communicate that stipulation clearly and consistently, and before the employee retires. Employers should also ensure that there are no statements made to employees that limit that right.