MONTREAL - Hundreds of unionized employees at AbitibiBowater (TSX:ABH) will soon be able to take long-planned early retirements after a Quebec judge ruled illegal the company's unilateral plan to amend their labour contracts.

Justice Clement Gascon said the insolvent forestry company couldn't prevent eligible workers from exercising their right to retirement.

"None of the arguments (by AbitibiBowater) justify the illegality of the gestures it made," Gascon said Monday in a scathing verbal ruling.

Calling the company's efforts illegal, improper and a violation of workers' collective agreements, he said any changes can come only through negotiations.

The newsprint and forest-products giant is under court protection from bankruptcy while it negotiates with creditors in the U.S. and Canada under the Companies' Creditors Arrangement Act.

The early-retirement allowance would cost AbitibiBowater's pension plan about $68 million if 200 workers were to retire at 57 rather than 58. However, the financial cost to the company would be about $400,000 a month after increased employee contributions.

Gaetan Menard of the Communications, Energy and Paperworkers Union said the ruling was a complete and total validation of the union's claim.

"It's a clear message to all the companies that are under CCAA that they have to respect the current collective agreement," the union's secretary-treasurer said outside the court.

Menard said the ruling assists workers who have planned to retire since the contract provision was changed in 2004.

Despite the win, workers would lose the early-retirement benefit should the company ultimately go bankrupt within a year.

The agreement was to come into effect Friday but the company said the cost was too high, particularly at a time of economic uncertainty.

AbitibiBowater spokesman Seth Kursman said the company won't appeal the ruling and will submit the pension amendments to government regulators in Quebec and Ontario for implementation.

"We are in a challenging times. There are sacrifices that people are making across the organization in all different forms," he said in an interview.

"This is something that we had planned on doing but the court made it clear that we could not make that decision on our own."

The union hoped to score a second victory Monday by convincing another judge to prevent the company from suspending special payments to pension plans which are underfunded by $1.4 billion.

The company has said it wants to temporarily stop the payments, required to make up for an insolvency deficit, because of its precarious cash flow situation. There has been no attempt to stop payments to retirees.

Under questioning from a lawyer for unsecured creditors owed $3 billion, Kenneth Brooks of court-appointed monitor Ernst & Young said negotiations to restructure the company would be soured if workers were to be treated differently than other creditors.

Justice Daniele Mayrand was told the union and Abitibi-Consolidated had agreed in 2004 to seek government approval to double the amortization of its underfunded pensions to lessen the company's cash burden.

The Quebec Federation of Labour on Monday denounced former AbitibiBowater CEO John Weaver's $17.5-million retirement package and $7.5-million salary for seven months of work before his retirement.

Weaver received $4.5 million in January before the company stopped payments.

"It's scandalous," union secretary general Rene Roy said in a statement.

"At a time when workers are fighting to save their jobs and their pensions, former CEO John Weaver was taking the money and leaving the company in a state of bankruptcy."

AbitibiBowater shares haven't traded since April 15.