moved that Bill C-219, an act to amend the Canada Labour Code (severance pay), be read the second time and referred to a committee.
Madam Speaker, it is an honour and pleasure to speak on my private member's Bill C-219.
The purpose of this bill is to remove from Part III of the Canada Labour Code that portion of section 235 which denies severance pay to employees who at the time they are terminated from employment are entitled to a pension under certain pension plans or legislation. Passage of this bill would end an injustice and would end the age discrimination which is now enshrined in the Canada Labour Code.
The Canada Labour Code governs the employment of 700,000 people in federally regulated industries, including transportation, telecommunications, grain handling and banking.
With the current wave of rationalizations, thousands of these workers are facing layoffs. Older workers are particularly vulnerable and workers entitled to a pension, even with reduced benefits based on early retirement, even reduced CPP benefits, are not eligible for any severance packages that their younger co-workers might receive.
Subsection 235.2(b), which this bill would rescind states:
An employer shall be deemed not to have terminated the employment of an employee where, either immediately on ceasing to be employed by the employer or before that time, the employee is entitled to a pension, under a pension plan contributed to by the employer-
In practice this means that if a company is laying off workers, it is not obliged to pay severance to older workers who are entitled to early withdrawal of pension benefits, even though they may be severely penalized for taking benefits before the normal pensionable age.
My interest in this subject arose from the misfortune of one of my constituents, Mr. Abe Peters of Swift Current, Saskatchewan, a 28-year employee of the now defunct trucking company, Motorways Limited. He was laid off along with hundreds of others on December 3, 1993. He was 58 years old at the time.
Employees were notified that they would receive the magnificent sum of two days' severance pay for each year of service. Someone should tell the Ontario public service workers about life in the real, cold hard world of federally regulated industries. In Mr. Peters' case, the severance package would have been $6,872.32.
Unfortunately, a second notice was delivered by way of the teamster's union to all employees aged 55 or over, advising that they would not be eligible for even that pittance because they were entitled to a pension under the Prairie Teamster's pension plan. A total of 240 employees were excluded from severance pay. The great majority had never expressed any desire to retire and few, if any of them, will ever be able to find work at their age within their field of occupation.
Mr. Peters and others vigorously protested their exclusion, first to the Great Lakes regional office of Labour Canada. The assigned inspector ruled that on the basis of subsection 235.2(b), their complaint against Motorways was unfounded because the hands of the bureaucrats were tied by the code.
An appeal was then filed on behalf of 133 of the plaintiffs and in January 1995, more than a year after the layoffs, Jack Chapman, QC, of Winnipeg was appointed referee. Mr. Chapman's 21-page judgment rendered on August 31, 1995 hinged on the premise that laid-off employees need not actively seek or apply for reduced pension benefits in order to be deemed eligible.
He did not explore, and was not asked to rule on, the issue of whether or not section 235 constitutes age discrimination under the charter. Mr. Chapman ruled:
There is absolutely no question that the primary legislation of concern to section 235(1) and (2) of division 11 of part III of the Canada Labour Code.
The scheme of this legislation is to provide for termination pay for employees who have completed 12 consecutive months of service. The legislation specifies the amount to be paid on termination.
Subsection 2(b) provides that an employer is not deemed to have terminated the employment of an employee where the employee is entitled to a pension. The purpose of the legislation appears to be to prevent an individual from receiving a double benefit, severance pay and a pension. The text of the legislation is simply whether the appellants were entitled to receive a pension. They were. Accordingly I confirm the decisions of the inspector and dismiss the appeal.
After losing his appeal Mr. Peters took a reduced pension at age 60. He lives on $487 a month and he feels cheated out of the $6,872.32 that he would have received had he been three years and some months younger. While it is too late to help him, I propose that other workers be protected in the future by passing Bill C-219.
Under the Canada Labour Code severance pay is a statutory right. Pensions on the other hand are a negotiated benefit paid for by the contributions of employers or workers or both. The two programs serve different needs and they have absolutely nothing to do with each other. They should not be traded off one for the other, nor should the two be considered a double benefit. It is a patently unfair situation.
Former Motorways employees under age 55 received severance pay and their accrued pension benefits were protected, while those 55 or over received neither their severance nor their full pension. If anyone received a double benefit, and I would vigorously argue
that nobody did, it would have been the younger workers who were able to receive severance pay and have their pensions vested. They had the option of leaving their pension funds in the plan or rolling them into RRSPs, a course of action which was not open to anyone over 55.
Older workers deserve the protection of the Canada Labour Code. Bill C-219 would replace section 235 with a simple clause that explains the circumstances deemed to be termination of employment.
It would also add a clause to section 236 which would explicitly make it clear that entitlement to a pension cannot be used as an excuse to deny an employee severance pay.
All over Canada statutes and regulations have been or are being changed to conform with the Canadian Charter of Rights and Freedoms. Age discrimination is no longer acceptable. Denial of a statutory right to someone purely on the basis of pension eligibility is in my opinion to deny it on the basis of age. Statutory rights are rights.
There are two issues here. The principal issue is that it is unjust and makes no sense to deprive an employee of severance pay just because he or she is entitled to a pension or some small portion of a pension bought and paid for by contributions unrelated to the severance package.
The second issue is whether people 55 years of age or older are of less value or are entitled to less legal protection than people age 54 years and 364 days. These two very important issues deserve to be fully debated in committee and in this House. I hope that such debate will ultimately lead to the passage of Bill C-219.
There are no Reform, Liberal, Bloc or NDP fingerprints on Bill C-219. It is a non-partisan, housekeeping measure to bring the Canada Labour Code up to date and to protect thousands of older workers who face layoffs as downsizing continues in the federally regulated industries.
Therefore at this time I beg the unanimous consent of the House to make Bill C-219 votable and have it sent to committee at the end of this debate.