A group of former Nortel employees gathered outside the Ontario legislature on Wednesday, angry that they may be losing their pensions as the company goes insolvent.

The rally, organized by the Canadian Auto Workers Union, hoped to persuade legislators to change bankruptcy laws to ensure that current and former employees don't take a back seat to bondholders and other parties when companies undergo financial restructuring.

Workers rally at Queen's Park on Wednesday to protest what they call unfair laws concerning current and former employees of companies undergoing restructuring. (Priya Sankaran/CBC)

"This travesty is being ignored by the Government of Ontario and the federal government," CAW leader Ken Lewenza said. "Governments in other countries where Nortel operated are taking action to secure pensions and not punish retirees for their years of service."

But in Canada, retired workers who helped build successful companies are being put at a disadvantage, Lewenza said.

Some former Nortel executives were on hand at the rally.

"This is about fairness," former Nortel president Robert Ferchat said. "We want justice for pensioners who stand to lose retirement savings, for fired employees who were denied severance payments and for disabled employees who were promised income replacement while they could not work."

Ferchat came to show support for the workers, he said, adding his own pension has been affected by unfair regulations.

Agnes Murray of London, Ont. was one of hundreds of former Nortel employees on hand for the rally. "I have 32 years with Northern Telecom," she said. "And as of January this year I don't know what the status is going to be — whether I'll have a pension, partial pension, benefits or no benefits.

"That's what we're after," she said.

Many firms affected

Nortel filed for bankruptcy protection in Canada on Jan. 14, 2009 under the Companies Creditors Arrangement Act. Since then, more than 1,000 workers have been terminated without severance pay, and in May, the company announced its defined benefit pension plans are only 69 per cent funded.

A similar situation faces workers laid off by Canwest Global Communications Corp, now that the media giant has put some of its business units under creditor protection.

'This travesty is being ignored'— CAW president Ken Lewenza

"If Canwest is in bankruptcy protection right now, what's that going to mean for me?" former Global TV producer Neil McArtney told CBC News.

As part of a severance package he signed earlier this year, he was to receive severance payments up until January 2010. But when the company sought protection from its creditors on Tuesday, he was informed his next payment, due Oct. 15th, would be the last.

He's still owed $12,000, he said. "The company says this is their right under the law, but I disagree," he said. "This is not right [and] I'm just one of thousands."

The Nortel pensioners are planning a similar rally in Ottawa on Oct. 21.