Disabled and retired ex-employees in pay dispute with Nortel

Nortel’s US arm is trying to project manage its way out of a dispute involving pensioners and disabled workers who were once at the company.

Nortel is gunning to shut off the health care and disability pay that it owes its former employees as well as squirm its way out of paying pensions. However, disgruntled ex staff aren’t letting the company off so easily. Although there have not been any figures on how much these pay outs to ex workers will cost, it is likely to eat up a chunk of the company’s assets. 

Nortel made roughly $7 billion selling off its businesses after filing for bankruptcy. Now it is trying to strike a deal with affected ex-employees, turning to mediators after the company failed to get the results it wanted. As Nortel puts it: “talks aimed at setting out terms have gone nowhere.”

The telecoms company is desperately trying to sort the terms out. At the moment, the dispute is causing an enormous delay in tying up all the loose ends. Meanwhile, debt investors want to grab the cash ex-staff are looking for.

A lawyer familiar with US employment law told TechEye that once a company has offered benefits including medical, disability, dental, and life insurance, the federal anti-discrimination laws and health plan enforcement regulations come into play. 

“These ensure that an employee’s rights are protected under those health plans,” he said. “This law is also loosely applied to those with disabilities and those with pension plans. The latter especially. If a pension plan is in place then a company must adhere to this, unless it has filed for bankruptcy and there is evidence that there is a lack of funds to pay this.”