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CEP asked the court to force the company to respect an agreement that allows employees with 20 years of service to retire at age 57, instead of 58
Montreal (4 May 2009) – Unionized employees at AbitibiBowater have won court approval to preserve negotiated early retirement rights. Quebec Superior Court rendered the decision today.
The Communications, Energy and Paperworkers Union (CEP) asked the court last week to force the company to respect a written agreement that allows employees with 20 years of service to retire at age 57, instead of 58, with full pension benefits.workers to retire at age 57.
The Montreal-based forest products giant has applied for bankruptcy protection in Canada and the U.S. and argued it can't afford pension top-ups for staff who wish to retire early.
The agreement was to come into effect on May 1 but CEP says the newsprint producer reneged on a deal.
Not only is that a great victory for CEP members, it also sends a strong message to companies that are under the Companies’ Creditors Arrangements Act (CCAA) that they have to respect current collective agreements,” says Gaétan Ménard, CEP Secretary-Treasurer
The forestry and newspaper giant is currently under court-ordered protection from bankruptcy while it negotiates with creditors in the U.S. and Canada.
Former employees of AbitibiBowater in central Newfoundland received a letter sent last week from the company telling them their pension payments are being reduced or cut off entirely.
Many of AbitibiBowater's former workers have been getting retirement benefits from unfunded pension plans, which aren't as secure as funded pension plans because they are good faith payments that were negotiated by the company and its workers. Rather than having a standing pension fund, the company makes payments each year for those pensions to continue.
With AbitibiBowater in creditor protection, the company said those payments are being stopped. According to the letter, any further distribution to be made under the unfunded plans can only be made pursuant to a court order or a plan of reorganization of the company.
CEP is expecting a second court decision this week on AbitibiBowater’s motion to temporarily cease payments that finance the company’s pension plan deficit.
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