Mandatory retirement ends for federally regulated employers
The federal government gave royal assent to Bill C-13, Keeping Canada’s Economy and Jobs Growing Act, on December 15, 2011. Several of the measures enacted have an impact on employment law for federally regulated workplaces. One of the measures repeals section 15(1)(c) of the Canadian Human Rights Act to eliminate the mandatory retirement age for federally regulated employees.
Mandatory retirement is the age at which persons who hold certain jobs or offices are required by industry custom or by law to leave their employment or retire. The normal age for retirement in Canada is 65.
With the repeal of mandatory retirement, federally regulated employers will no longer be able to terminate employees who have reached what was considered “the normal age of retirement” for workers in similar positions, unless there is a bona fide occupational requirement. Employees may now elect to leave their employment at a date and in the circumstances of their own choosing.
A bona fide occupational requirement (BFOR) occurs when the nature of a job and performance of essential duties require that an employee stop working at a specified age (which could be 65 or even younger). The Supreme Court of Canada has developed a three-step test for determining whether an occupational requirement that is discriminatory on its face is nevertheless a BFOR. In such cases, the employer must show that an age-based job requirement or qualification is a BFOR by establishing on a balance of probabilities:
- That the employer adopted the mandatory requirement for a purpose rationally connected to the performance of the job
- That the employer adopted the mandatory requirement in an honest and good faith belief that it was necessary to the fulfilment of a legitimate work-related purpose
- That the mandatory retirement requirement is reasonably necessary to the accomplishment of a legitimate work-related purpose
To show that the requirement is reasonably necessary, the employer must demonstrate that:
- The employee does not meet the job requirement or qualification, and/or
- The employee could not be accommodated without causing undue hardship to the employer
The above amendment comes into force one year after the day on which this Act receives royal assent, meaning December 15, 2012. This will provide employers with a one-year period to adjust to the changes and review their workplace policies, practices and collective agreements to ensure compliance.
All Canadian jurisdictions have now abolished mandatory retirement. New Brunswick has maintained a special provision in its Human Rights Act that establishes that age discrimination in employment is prohibited and there is no upper age limit to this protection. However, an employer is permitted to put in place a mandatory retirement plan if it is made in good faith and with a genuine purpose (by establishing a bona fide retirement or pension plan). This is allowed under the New Brunswick Human Rights Act subsections 3(5) and 3(6)(a).
As a general principle, older workers should be assessed on their own merits instead of presumed group characteristics, and offered the same opportunities as everyone else in hiring, training and promotion. They should be subjected to the same performance management practices as every other worker. Age, including assumptions based on stereotypes about age, should not be a factor in decisions about temporary layoffs or terminations.
In addition, anti-harassment and anti-discrimination policies and training, including complaint procedures, are valuable tools in promoting equity and diversity within an organization. Adoption, implementation and promotion of these policies can help to limit potential harm, and reduce the organization’s liability in the event of a complaint. These policies should explicitly address discrimination based on all grounds of the prohibited ground found under human rights legislation, including age.
First Reference Human Resources and Compliance Managing Editor