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Mandatory retirement has been eliminated − is anyone listening?

listeningOld habits die hard. The Human Resources industry is obviously having a hard time abandoning the notion that 65 is the accepted age for retirement. Since amendments to the Ontario Human Rights Code in 2006, employers are prohibited from discriminating against employees based solely on age. Prima facie compelling retirement at age 65 is a breach of the Code.

The implications of this change are extensive. Not only is an employer precluded from compelling employees to retire at age 65, it cannot advertise positions on the basis that the candidate must be less than a certain age. Employers should avoid asking questions, or seeking documents, in the course of the recruitment process which reveal the candidates age. Employees, or potential employees, who believe they have been subjected to age discrimination in the hiring process, can file a complaint with the Ontario Human Rights Tribunal.

In certain circumstances, consideration of an employee’s or potential employee’s age is permissible. Where the employer can demonstrate that there is a “bona fide occupational requirement” (often referred to as “BFOR”) related to age, it can use age as an employment criteria. Where the employer raises BFOR as a response to a human rights complaint, the onus is on the employer to prove the occupational requirement.

In a recent decision of the Ontario Human Rights Tribunal, released on July 27, 2011, it was held that the failure of an employer to allow an employee to return to work after an eighteen month disability leave was not a breach of the Code as the company had demonstrated that it had lost a significant amount of business while the applicant was on disability leave, and therefore no longer required his services. The Tribunal found that the applicant’s absence from work for the prior eighteen months constituted a bona fide occupational requirement, justifying his dismissal.

In a subsequent decision of the Tribunal, the test stated as follows:

  1. Is the physical requirement adopted by the employer for a purpose or a goal that is rationally connected to the performance of the job?
  2. Was that requirement adopted in an honest and good faith belief that it was necessary to fulfill the requirements of the job?
  3. Can the complainant’s disability be accommodated without imposing undue hardship on the employer?

The Tribunal held that the employer had failed to demonstrate that the disability could not be accommodated. It therefore found that the employer had breached the Code and ordered it to accept the complainant for employment.

These cases demonstrate that any employer seeking to compel retirement at age 65 will have a significant onus to show that the employee over 65 cannot perform the duties of his position. However, it does not mean that a policy of mutually agreed retirement at a specific age cannot be implemented. There is nothing in the legislation that prohibits employees from agreeing to retire at age 65 in order to take advantage of whatever retirement income is offered by the employer.

With the changing demographics of the work force, and the aging of the baby boomers, retaining workers will become a higher priority for employers than the concern over retiring these workers. Employers will have to consider flexible work hours, telecommuting, and ergonomic reviews of the work environment in order to facilitate the continued participation of older workers. The recent change in the law facilitates such efforts.

As with any workplace policy, specific legal advice as to the implementation of such policy should be obtained.

Earl Altman
Garfinkle Biderman LLP

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Earl Altman

Legal consultant at EA Consulting
Earl Altman was a partner at Garfinkle, Biderman and now heads his own consulting firm. Earl has practiced commercial and employment litigation. Earl’s practice focuses on employment disputes, including acting for employees and employers in wrongful dismissal claims, and in breach of contract and breach of fiduciary duty claims. Read more
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