Telus 2005 Annual Report Download - page 22

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costs for the second quarter of 2005. Should the assessed damages be significantly different
from management’s expectations, a material adjustment could be recorded in the Company’s
Statements of Income.
On December 16, 1994, the TWU filed a complaint against BC TEL with the Canadian Human
Rights Commission (the “CHRC”), alleging that wage differences between unionized male and
female employees in British Columbia were contrary to the equal pay for work of equal value
provisions in the Canadian Human Rights Act. In December 1998, the CHRC advised it would
commence an investigation of the TWU complaint and following the investigation of preliminary
matters referred the complaint to conciliation under the Canadian Human Rights Act.
Conciliation did not result in resolution and the matter was referred back to the Commission for
further investigation. Included in the terms of the ratified settlement of the 2005 collective
agreement between TELUS and the TWU, was a letter of agreement under which the Company
has agreed to establish a pay equity fund of $10,000,000 to be paid out to persons covered by the
complaint subject to the TWU’s withdrawal of the complaint and the CHRC’s acceptance of and
concurrence that the complaint is withdrawn and settled. On December 21, 2005, the TWU
withdrew and discontinued this complaint. Subsequently, in a letter dated January 30, 2006 TELUS
was advised by the CHRC that it would take no further proceedings and close its file on the matter.
Two lawsuits were commenced against TELUS and other defendants in the Alberta Court of
Queen’s Bench on December 31, 2001 and January 2, 2002 respectively, by plaintiffs alleging to
be either members or business agents of the TWU. In one action, the three plaintiffs alleged to
be suing on behalf of all current or future beneficiaries of the TELUS Corporation Pension Plan
(“TCPP”), and in the other action, the two plaintiffs allege to be suing on behalf of all current or
future beneficiaries of the TELUS Edmonton Pension Plan (“TEPP”). The statement of claim in
the TCPP-related action named TELUS, certain of its affiliates and certain present and former
trustees of the TCPP as defendants, and claims damages in the sum of $445 million. The
statement of claim in the TEPP-related action named TELUS, certain of its affiliates and certain
individuals who are alleged to be trustees of the TEPP and claims damages in the sum of
$15.5 million. In May 2002, the statements of claim were amended by the plaintiffs and include
allegations, inter alia, that benefits provided under the TCPP and TEPP are less advantageous
than the benefits provided under the respective former pension plans, contrary to applicable
legislation, that insufficient contributions were made to the plans and contribution holidays were
taken and that the defendants wrongfully used the diverted funds, and that administration fees
and expenses were improperly deducted. TELUS has filed statements of defence to both the
original and the amended statements of claims. As a term of settlement of the 2005 collective
agreement between TELUS and the TWU, the TWU has agreed to not provide any direct or
indirect financial or other assistance to the plaintiffs in these actions, and to communicate to the
plaintiffs the TWU’s desire and recommendation that these proceedings be dismissed or
discontinued. TELUS has been advised by the TWU that the plaintiffs have not agreed to
dismiss or discontinue these actions. While the likelihood of the actions being determined
adversely against TELUS is still being evaluated, but TELUS believes it has good defences to
the actions. Should the lawsuits continue because of the actions of the court, the plaintiffs or for
any other reason, and their ultimate resolution differ from management’s assessment and
assumptions, a material adjustment to the Company’s financial position and the results of its
operations could result.