Summary

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Summary

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Employment law Unjust dismissal Damages Pensions Whether pension benefits received by the respondent during his wrongful dismissal notice period should be deducted from his wrongful dismissal damages award.

The respondent was employed by IBM (U.K.) Ltd. and then IBM Canada Limited for over 40 years before being terminated without cause with two months notice. When his employment terminated, he was 65 years of age and eligible to receive benefits under IBM’s employer funded pension plan. He had no intention of retiring and sued for wrongful dismissal. After termination, he received a pension benefit of $2,124.25 per month. The trial judge held that the appropriate notice period was 20 months. He awarded damages based on lack of notice for 18 months. The respondent was paid pension benefits after termination based on a fully vested pension. The trial judge did not deduct the amount of pension benefits paid during the notice period from the damages award. IBM Canada Limited appealed, arguing that an amount equal to the pension benefits should have been deducted from damages. The Court of Appeal dismissed the appeal.

Lower Court Rulings