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An aging workforce: mandatory retirement (Part II)

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Thanks for checking back in for the second part of my aging workforce series—on mandatory retirement. You can read part 1, on age discrimination, here.

Across Canada, mandatory retirement has been all but completely phased out.

Recently, all Canadian jurisdictions in Canada, except for federally regulated workplaces, have enacted legislation to amend their human rights laws and end the practice of mandatory retirement at age 65. This means human rights legislation prohibits discrimination in respect of employment because of a person’s age. Employers cannot force workers to retire because they reach a certain age, the norm being 65. The federal government has not moved to abolish mandatory retirement in relation to employees of federally regulated employers. The Canadian Human Rights Act states that it is not a discriminatory practice to terminate an employee because of age if that individual has reached the normal age of retirement. And federally regulated workplaces (where the employment relationship is governed by the Canada Labour Code) continue to follow this statute.

Note that even in the jurisdictions that ban mandatory retirement, there are exemptions that allow mandatory retirement when there is a bona fide retirement plan or pension plan in place, or when there is a mandatory retirement policy based on a “bona fide occupational requirement”. According to human rights legislation, a bona fide occupational requirement in the context of age is a standard that says the nature of the employment is such that, for some reason, a person’s age will affect their ability to perform the job. Common examples include pilots, security guards, firefighters, police persons, ambulance attendants, among others. For an employer to apply this exemption, the bona fide occupational requirement must be reasonably necessary to accomplish the legitimate work-related purpose and be adopted in good faith. In most cases, this means that a certain level of physical and mental capability is absolutely necessary for the performance of the job, and above a certain age, those capabilities might not be present.

If an employer forces an employee to retire at age 65, and has in place no bona fide pension plan, scheme, practice of mandatory retirement, or a bona fide occupational requirement that the employer can rely on which would allow the termination, a Human Rights Tribunal could decide that the employer has discriminated against the employee on the basis of age. Again, except in federally regulated workplaces.

However, the validity of mandatory retirement in federally regulated workplaces has been brought into question. On August 28, 2009, the Canadian Human Rights Tribunal found Air Canada’s mandatory retirement policy unconstitutional and in breach of the Canadian Charter of Rights and Freedoms. The decision has significant implications not just for aviation, but for all employees and employers deemed federally regulated, including those involved in transportation, banking and telecommunications.

Air Canada pilots’ collective agreement has provided for retirement at the age of 60 since the 1950s. Pilots George Vilven and Robert Neil Kelly were both forced to retire from Air Canada at the age of 60, and took their cases to the Canadian Human Rights Commission. The tribunal initially rejected their complaints based on the CHRA, because the mandatory retirement age was the industry norm. The tribunal also rejected the argument that the retirement clause was a breach of the pilots’ Charter rights. However, the Federal Court disagreed and found mandatory retirement was a Charter breach. The Court sent the case back to the tribunal to see if the breach was reasonably justified. And the tribunal ultimately agreed.

The tribunal found that Air Canada’s mandatory retirement policy in the collective agreement could not be justified as a bona fide occupational requirement, since airline pilots are given frequent competency and medical tests to ensure they’re capable of flying. Pilots over age 40 are also required to undergo physical examinations every six months. Notwithstanding the above requirement, Air Canada’s pilots’ part of the Air Canada Pilots Association recently voted by a three-to-one margin to uphold the current retirement age of 60.

The complainants, Vilven and Kelly, sought a number of remedies including reinstatement; restoration of seniority and service; damages for lost income; as well as lost pension and other benefits. The commission also asked for a cease and desist order and significant revision to Air Canada’s workplace policies on mandatory retirement. However, the tribunal felt that these requests would involve considerable readjustment to the current workplace regime and imposing them would require much more information than had been presented to the tribunal. Thus, it will be necessary for stakeholders to provide further evidence and submissions taking into account this decision. The saga continues.

The Air Canada Pilots Association is appealing the decision of the Canadian Human Rights Tribunal to the Federal Court of Canada on the question of mandatory retirement age for pilots.

The tribunal decision can be read at the CHRT website.

Part three of this series will discuss early and phased retirement. A recent Ipsos Reid poll indicates that a majority (63 percent) of working baby boomers (aged 50 to 64) would rather ease into retirement or continue working than make a hard stop at age 65; meaning, they’d rather ease into retirement by working reduced hours or stay on with their current employer past a traditional stop date at age 65 rather than call it quits. The federal and some provincial governments are making this possible by allowing the possibility of phased retirement in their pension legislation and the Canada Pension Plan.

Do you have a mandatory retirement policy in place based on a bona fide retirement plan, pension plan, or occupational requirement? How is it working for you?

Yosie Saint-Cyr
First Reference Human Resources and Compliance Managing Editor

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Yosie Saint-Cyr

Managing Editor at First Reference Inc.
Yosie Saint-Cyr, LL.B., is a trained lawyer called to the Quebec bar in 1988 and is still a member in good standing. She practiced business, employment and labour law until 1999. For over 15 years, Yosie has been the Managing Editor of the following publications, Human Resources Advisor, Human Resources PolicyPro, HRinfodesk and Accessibility Standards PolicyPro from First Reference. Yosie is one of Canada’s best known and most respected HR authors, with an extensive background in employment and labour across the country. Read more
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