Scrapping of mandatory retirement age forces employers to adapt

When most Canadian jurisdictions recently eliminated mandatoryretirement, workplaces across the country were forced to quickly adapt.

When most Canadian jurisdictions recently eliminated mandatory retirement, workplaces across the country were forced to quickly adapt. With an aging workforce, and compulsory retirement no longer an option, employers were suddenly faced with fewer options to transition older employees into retirement. As this scenario unfolded in courtrooms across the country, various lessons were learned:

This month, the Canadian Human Rights Tribunal ruled in favour of two Air Canada pilots who complained that their forced retirement at age 60 was discrimination. The Tribunal initially rejected their complaints based on an exemption that permitted employers to retire them if the retirement age was an industry standard. But on appeal, the Tribunal ruled that Air Canada could not properly justify the policy. The decision is explosive as it applies equally to all federally regulated employers, who will now be revisiting their policies.

Although there is no legal distinction between an older employee and a younger counterpart, workplace changes should be considered under the lens of the employee’s ability to adapt. When B.C lumber company, Lakeland Mills, took steps to retrain 66-year-old Kathleen Fisher in order to fill a vacant position, it did not believe it was forcing Fisher to retire. However, as mandatory retirement was still in effect in British Columbia, Fisher was concerned. When she couldn’t master the new role, she the the company president she was being forced to retire. When he did not disabuse her of this perception, she left and successfully sued for constructive dismissal. The changes to Fisher’s job, however minor, were magnified when her age limited her ability to respond to the new work or her employer’s efforts to train her.

Employers are also unable to use workplace policies, such as pension plans, to subvert the legislation. Recently, the B.C. Court of Appeal found that 65-year-old Stuart Johnson had accepted mandatory retirement as a term of his employment by voluntarily joining his company’s pension plan and continuing to work for years with knowledge that the mandatory retirement policy applied to him. As Johnson’s lawsuit was “grandfathered” under the old legislation, the Court did not find there was discrimination. However, today, the result would be very different. As every province -- except for New Brunswick -- has eliminated a retirement age from its legislation, employers can no longer force employees to retire without a human rights complaint or significant lawsuit.

Similarly, if firing older employees, employers cannot discount severance entitlements. Mistakenly believing that Alberta human rights legislation permitted it to retire Leo Magnan when he turned 65, Brandt Tractor Ltd. effectively forced his retirement, despite Magnan’s statements that he did not wish to leave at that time. However, as Magnan had indicated that he would soon retire anyway, the court reduced his damages, finding Brandt should not have to pay severance to an employee that would no longer look for work. On appeal, this finding was reversed. Consequently, if employers wish to terminate older employees, the customary employment law principles regarding severance will have to be considered and then provided.

 

Daniel A. Lublin is an employment lawyer focusing on the law of dismissal. dan@toronto-employmentlawyer.com.

 
 
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