Retirement at a Fixed Age
At one time not so long ago, it was quite legal to terminate an employee due to their reaching the age of 65. This was previously legal in the sense that it was not considered to be a violation of human rights law. It may or may not have entitled the worker to a wrongful dismissal claim.
Federal law, until December of 2009, allowed for termination in this manner at age 65.
Ontario abolished mandatory retirement in December of 2006. This remains the law today. It is a violation of human rights protections to terminate or take any other adverse action, such as refusing to offer new employment, based on the age of the person, provided that the person is over the age of 18.
It is still permissible to terminate (or take other actions) based on age where the age is a “bona fide occupational requirement”. In this instance, there must be a valid reason which is connected to the employee’s ability to perform the job.
There is a two-prong test applied which involves the need to show both a subjective and objective component. It goes beyond the corners of this post to analyze the merits of all the issues in these tests but the important issue to note is that it can be done. It is the employer’s duty to meet these tests, which is not an easy one to pass.
If the employer does intend to take this position, it should define this clearly in a policy manual to all its employees and illustrate why it has determined to take this position.
Certain industries have traditionally used mandatory retirement plans at set ages, such as police and fire fighting which typically required retirement at age 60. The Supreme Court of Canada has no longer permitted such employers to argue presumed group characteristics that are associated with ageing. Today, such an employer must demonstrate that an individualized testing process is impossible to administer.
The issue with respect to firefighters was put to rest in Ontario by specific legislation which superseded the Human Rights Code, which allows for mandatory retirement, subject to the right of the employee to prove otherwise, by reasonable accommodation.[
An early case (McKee v. Hayes-Dana Inc.) finding age discrimination[ showed the applicant had been employed in excess of thirty-two years, the last seventeen of which, was as a foreman in the forge shop.
In August of 1985, at age 57, he was terminated, as was another foreman, aged 56. Also terminated at the same time was a buyer/scheduler and a steel buyer, aged 61, who had been employed for thirty-seven years.
However, a year prior, a production foreman had been added to management. Shortly thereafter, two additional management employees were hired, a tool room foreman and a production control supervisor. Two younger foremen were retained in the employ of the company.
McKee was offered the options of (1) being laid off, receiving full salary for six months and if business recovered in this period, he would be returned to the workforce, or (2) he could retire immediately and receive a supplemental payment to ensure no pension reduction due to early retirement. McKee chose the second option.
The Board concluded a prima facie case had been made out. The employer’s response that there were certain performance issues was not accepted on the evidence.
The Board observed that a note had been taken some three months following McKee’s termination which that the company “hoped to keep people with a career potential”. [
The Board interpreted this as “an indication that the company intended to retain employees who were not on the verge of retirement, and who had many years of service left to perform.” Affirmative evidence of such a calibre is, however, rare.
Liability was found. McKee was awarded his lost income until age 65, a period of approximately 8 years, of which fifteen months was prospective at the time the remedy decision was delivered.
This case sets the high-water mark for age discrimination cases in Ontario. Apart from one case in which reinstatement was ordered due to an overt medical requirement that had age relevance, cases alleging such a Code violation in Ontario due to age have generally been of a modest nature.
Employers must be aware that they cannot take affirmative action of termination or otherwise due to age. Companies should also be mindful of the general law that a human rights violation need only be a factor, not the sole factor to lead to a human rights claim.
Individuals should be aware of their rights. Ontario’s population is an ageing one. Older workers make up a significant element of the working population. It is important to know your rights.
This is a critical question for all sides to understand. For advice on this and similar issues and, indeed, any employment issue, contact the offices of Toronto employment and labour lawyers Mallins Law. We regularly advise employees and employers on legal workplace issues. Contact us online or by phone at 647 792 0310 to schedule a consultation.