On January 11, 2010, the Ontario Court of Appeal released its decision in Hydro One Inc. v. Ontario (Financial Services Commission). The central issue in the case was whether the number of employees terminated as part of a restructuring could be considered “significant” under the Ontario Pension Benefits Act thereby constituting grounds for a partial wind-up order.

The Hydro One pension plan at issue was comprised of three distinct groups of members:  2,761 members from the Power Workers’ Union, 773 members from the Society of Energy Professionals, and 379 members were non-union salaried employees. Over several years, Hydro One engaged in a restructuring that resulted in 126 employees having their employment terminated, 53 were members of the Society and 73 were non-union salaried employees. The Court of Appeal held that the number of terminations, although very small relative to the total number of members of the pension plan, was significant in terms of a subset of plan members. In doing so, the Court upheld the decision of the Divisional Court which concluded that the meaning of what is a “significant” number of members, and consequently whether or not to order a partial wind-up, may vary depending upon the particular circumstances.  In some cases, it may require an absolute number of members while in others it may require a proportion of members either to the total number of plan members or to a subset of the total membership.

For more information on this decision, please see Heenan Blaikie’s Pension Pulse ” The Perils of Partial Wind-Ups: Ontario Court of Appeal Releases Decision in Hydro One”.