Brewing company not required to double contributions for disabled employees, artbitrator rules
January 23, 2025
After a dispute between Molson Coors Beverage Company (the “employer”) and the Canadian Union of Brewery and General Workers’ (the “union”) regarding the interpretation of language in a pension memorandum of a collective agreement regarding contributions to a defined contribution (DC) plan while a member is disabled, an arbitrator found that the employer was only required to make its own pre-disability contributions to the DC plan during the period of disability (not the employer and member contributions).
Until 2010, the employer provided only a defined benefit (DB) plan for employees in the bargaining unit. Employees who became eligible to participate in the employer's pension plan on and after January 1, 2010, were enrolled in a DC plan. Effective January 1, 2024, all employees were transferred from the DB plan to the DC plan.
The pension memorandum with respect to the DC plan provided that a member entitled to benefits under a disability plan sponsored by the employer or under workers' compensation would not contribute to the DC plan during such period, however, the employer would continue to remit to the DC plan at the rate in effect immediately prior to the member's disability.
The union argued that this required the employer to contribute the member's pre-disability contribution as well as the employer's matching contribution to the DC plan during the period of disability. The union said that the pension memorandum when interpreted having regard to the collective agreement as a whole and the relevant pension plan documents supported its position. The employer disagreed and argued that the language in the pension memorandum only required the employer to continue to make its pre-disability contribution during the period of disability.
The arbitrator sided with the employer, finding that the union's arguments were based on a contortion of the collective agreement and pension plan, importing a concept of "accrual" from the DB plan that did not apply under the DC plan. Based on the language of the pension agreement, the arbitrator concluded that the employer was only required to continue making its own pre-disability contribution to the DC plan during a member’s period of disability. It did not require the employer to make both its and the members' contributions during such period.
The union also asserted that the plan contravenes the Ontario Human Rights Code. While the parties agreed to hold that issue in abeyance pending the determination by the arbitrator, this union is now free to move forward with the claim.
To read the arbitrator's decision, click on more information below:
