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© Copyright 2000 Rogers Media. The following article first appeared in the March 2000 edition of
BENEFITS CANADA magazine.
Get with the times
A spouse is a spouse, regardless of sex. Why should employers care who gets benefits?
BY DIAN COHEN
Considering that the world is getting more global by the day, and around the world is as close as
around the block, it is astonishing how much of a drag on progress some of our legacy systems are.
On the one hand, newly formed companies are eschewing defined benefit (DB) plans in favour of defined
contribution (DC) or group registered retirement savings plans, and older companies are reviewing their
plans with an eye to disintegrating them from the Canada Pension Plan--giving employees the choice of DB or
DC.
On the other hand, a few companies are trying to restrict even further the eligibility of employees and
their spouses to the bounty of pensions and benefits, like overbearing parents controlling wayward
children.
CASE LAW
Thus we have the spectacle of several lawsuits (and several more to come) based on discrimination--in this
case, discrimination based on sexuality.
The heart of the matter is whether a firm can force people out of the closet by defining a couple as "one
of each sex," or--if same sex has been recognized for purposes of medical benefits--can a firm insist that
no one is able to register a same sex spouse for survivor benefits if they retired before the Income Tax
Act was changed to include same sex spouses in April 1998.
Three major cases have come to court based on Section 15 of the Charter of Rights and Freedoms, which came
into effect in 1985. Sexual orientation was not excluded from the charter.
In one case, the judge found that the plaintiff was discriminated against by the Income Tax Act and could
not be excluded from a major pension plan simply because he had not disclosed that he was gay. Remember,
gay participants still had to pay into the plan they were excluded from. The judge ordered that the words
"or same sex" be read in the Income Tax Act.
Another case, known as M vs. H, involved a claim for alimony. Two women, living as spouses, owned their own
company. When they separated, one requested alimony from the other. Ontario's Family Law Act, however,
permitted alimony only between opposite sex couples.
This case was ultimately decided in favour of the women, who remain "in the closet" by Court order to
protect them from the business discrimination they both faced.
DEEP-SEATED HOMOPHOBIA
The issue of retroactivity crops up in many company rejections of claims for spousal benefits. In some
instances, it is evident that the position stems from a deep-seated homophobia amongst the senior corporate
managers.
For example, an Imperial Oil employee, Dave Mitges, was denied access to survivor benefits for his spouse.
When Exxon (Imperial Oil's parent company) merged with Mobil Oil, it came to the attention of case watchers
that Mobil's plan allowed retroactivity and Exxon's did not. The merged company's plan will not allow it,
and this case will likely go to the Supreme Court.
Doug Elliott, a partner in the law firm of Elliott and Kim LLP, and well-known internationally as an
authority on the topic, says: "Retroactivity has not yet been specifically confronted by the courts, but
other case law suggests that the exclusion of a same sex spouse because the employee hadn't come out before
retirement is both unlawful and unconstitutional."
This kind of obfuscation is more worthy of a government bureaucrat than a private sector manager whose
company's survival depends on responsiveness and client value.
Forward-looking human resource directors are already foreseeing the day when employers will say to their
employees: "Here is your total compensation package. How do you want to take it?" Why would anyone care who
gets survivor benefits? Aren't they simply the deferred wages of the employee, available for whomever that
person designates?
Dian Cohen is an economics consultant with a special interest in pension issues.
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