Union can sue Hershey for its fair share of sweet rebate

Union says Candyman not sharing the EI goodies

Under the Employment Insurance Act, employers can reduce their premiums if they provide their employees a wage-loss plan and guarantee that the employees will benefit from the premium reduction to the extent of at least five-ßtwelfths of the reduction.

Recently, an Ontario union instituted a class action against Hershey Canada, the confectioner, alleging that the union’s members had not received the benefit of the reduction from 1987 on.

That action recently survived a motion by Hershey to abort it early on.

Hershey applied for the EI premium reduction in 1975, advising the commission that it was setting up a medical plan in keeping with the five-twelfths premium-reduction scheme.

From 1975 until 1987, the union’s collective agreement with Hershey provided that the medical plan would stand in lieu of the five-twelfths rebate.

After that, the medical plan stayed in place, but the collective agreement no longer referred to the rebate.

Given the change to the agreement, the union now says that the members are entitled to the rebate as a statutory benefit from 1987 on.

The union complained about the matter to EI’s Premium Reduction Program, and an officer at the commission decided that, as long as the medical plan was in place, Hershey was deemed to be complying with the requirement that its employees share the rebate.

The union then went to court, and Hershey brought a motion to end the suit early on. On that motion, Hershey argued that the commission officer’s decision ended the matter.

The court did not have the jurisdiction to relitigate the question, Hershey said.

But Ontario’s highest court has disagreed. Writing for the court, Justice James Carthy has ruled that the officer’s only jurisdiction was to decide whether the employer was entitled to a premium reduction.

He did not have jurisdiction to decide whether the employer had met its statutory obligation to share the rebate with its employees.

The commission can fine employers who made false statements, Justice Carthy says, but it cannot order reparations to the employees.

In other words, the lawsuit can proceed, because the officer did not decide the central question in issue — whether Hershey owed its workers their fair share of the rebate.

Somehow, we can’t help but think of those days when Mom insisted we give our little sister at least five-twelfths of the chocolate bar, and preferably six.

For more information:

Rathwell v. Hershey Canada Inc., Ontario Court of Appeal docket no. C32963, July 7/00.

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