Compensation for Pension Benefit Losses in Unlawful Dismissal

This paper describes, firstly, how the "real-world" pension benefit losses of an unlawfully dismissed employee are dictated by three main variables: the benefit structure of the plan; the legal structure of the plan; and the employee's position in the labour market. Secondly, it shows that the common law measure of damages in a wrongful dismissal action fails to compensate adequately those losses. In contrast, the measures of damages in collective agreement arbitration, and in adjudication pursuant to section 61.5 of the Canada Labour Code' create the potential for a more realistic approach to compensating the employee for his "real-world" losses. Thirdly, comparison is made with the more fully developed jurisprudence under the British unfair dismissal legislation. Fourthly, some guidelines for compensating the "real-world" pension losses of the employee are suggested for Canadian legal umpires.