GM Canada can't cut workers' retiree benefits

General Motors Canada breached its contract when it reduced the health care and life insurance benefits for some of its retired workers, an Ontario court ruled Wednesday.

But court clears way to reduce executive retiree package

An assembly line worker at the General Motors Assembly plant in Oshawa. A court has ruled GM cannot unilaterally cut retiree benefits for workers. (Chris Young/Canadian Press)

General Motors Canada breached its contract when it reduced the health care and life insurance benefits for some of its retired workers, an Ontario court ruled Wednesday.

In a 27-page decision, Ontario Superior Justice Edward Belobaba said GM Canada was "not contractually entitled" to make changes to the benefits of salaried retirees.

In some cases, the long-time retirees saw their basic life insurance benefit cut from more than $100,000 to $20,000.

However, the court ruled the automaker was within its rights to reduce or eliminate some of the additional benefits enjoyed by its executive retirees.

The decision comes after a class action lawsuit was launched against GM Canada in 2010.

The case was on behalf of more than 3,297 retirees and their families including 67 executive retirees.