Laurentian University staff and faculty unions propose court action for lost benefits

Laurentian University's staff and faculty unions want to take some of the Sudbury, Ont., school's directors and officers to court once it exits its insolvency proceedings.

The unions allege Laurentian mismanaged the Retiree Health Benefits Plan, which members have paid into since 1998.

When Laurentian filed for insolvency in February 2021, retirees were cut off from the annualpayments they received through the plan.

Tom Fenske, president of the Laurentian University Staff Union, said his retired members received $700 to $1,500 per year from the plan, depending on whether they paid into a single or family option.

"I think the idea is that when someone retires, they should be left alone," Fenske said.

"And what that means is, you know, they gave at the office, they worked their whole career, they worked hard. And many of them are on fixed incomes, so they can't adjust."

The staff and faculty unions have said Laurentian placed the millions of dollars members paid into the plan into a single account, mixed in with other funds meant to operate the university.

Fenske said the money should have been placed in a separate account instead.

When Laurentian filed for insolvency, retirees could no longer access the money from that benefit plan, which they had relied on in the past.

Linda St-Pierre, chief steward of the Laurentian University Faculty Association, said in an email to CBC News that the university's administration was "aware as far back as 2014 they were not properly maintaining the funds."

St-Pierre said the faculty association tried to resolve issues with the benefit plan, including moving the money to a third-party plan, but those plans fell through.

"There was a lot of liability that they were trying to shift to employeegroups," she said.

St-Pierre said both unions will work together on legal action against the university's senior administrators, responsible for the plan.

Leaving insolvency proceedings

Laurentian's insolvency proceedings, under the Companies' Creditors Arrangement Act (CCAA), have protected it from lawsuits. Under the CCAA, the school hasbeen allowed to operate while sorting out its financial issues.

But Fenske, of the staff union, said the university's proposed plan of arrangement would let the unions take legal action.

The plan is the culmination of the 18-month CCAA proceedings, and represents the final terms between Laurentian and its many creditors.

Laurentian filed the plan with the Ontario Superior Court of Justice last month, and got court approval for its creditors to vote on the proposal.

That vote will be held on Sept. 14 and will require a two-thirds majority to pass.

Fenske said he will meet with his members on Aug. 16 to discuss the plan of arrangement and see if there's an appetite for legal action.

"The idea that people would be held accountable for what they did here, especially with pensioners' retiree health benefits, that should be a priority," he said.

"We are fully focused on readying for students' return in September and the important vote on September 14 on the Plan of Arrangement," Laurentian said in an email to CBC News.