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Denial of employee benefits to working seniors: a charter violation

age discrimination

On May 18, 2018, the Human Rights Tribunal of Ontario (the “Tribunal”) rendered its decision with respect to the issue of whether s. 25(2.1) of the Human Rights Code (the “Code”), when read alongside s. 44 of the Employment Standards Act, 2000 (“ESA”), permitted employers to terminate benefits for employees when they turned 65. In Talos v. Grand Erie District School Board, the Tribunal found that such a termination violated s. 15 of the Canadian Charter of Rights and Freedoms, because it was a form of age discrimination. The section could not be saved under s. 1 of the Charter, and thus, was found to be unconstitutional since it violated the right to equality in a manner that was not demonstrably justified in a free and democratic society.

Wayne (Steve) Talos continued to work as a secondary school teacher beyond the age of 65. However, when he turned 65, his extended health, dental, and life insurance benefits were terminated, even though he was still employed on a full-time basis. Mr. Talos heavily relied on the benefits, since they assisted with both his and his family’s medical and other expenses, especially since his wife had become severely ill and was ineligible for other benefits to cover her expenses.

The section of the Code on which the employer relied to differentiate the entitlement to employee benefits and pension plans on the basis of age was s. 25(2.1) of the Code, as seen in the following related provisions:

Employee benefit and pension plans
25 (1) The right under section 5 to equal treatment with respect to employment is not infringed where employment is denied or made conditional because a term or condition of employment requires enrolment in an employee benefit, pension or superannuation plan or fund or a contract of group insurance between an insurer and an employer, that makes a distinction, preference or exclusion on a prohibited ground of discrimination.

(2) The right under section 5 to equal treatment with respect to employment without discrimination because of sex, marital status or family status is not infringed by an employee superannuation or pension plan or fund or a contract of group insurance between an insurer and an employer that complies with the Employment Standards Act, 2000 and the regulations thereunder.

(2.1) The right under section 5 to equal treatment with respect to employment without discrimination because of age is not infringed by an employee benefit, pension, superannuation or group insurance plan or fund that complies with the Employment Standards Act, 2000 and the regulations thereunder.

Mr. Talos took the position that the distinction in age when it came to benefits discriminated against employees who were 65 years and older, in particular since mandatory retirement was prohibited in Ontario through Bill 211 in 2005. As such, Mr. Talos claimed monetary compensation of $100,000 for lost benefits, as well as injury to dignity, feelings and self-respect.

The Tribunal found that Mr. Talos experienced disadvantage because of his age. The Tribunal concluded that employees who worked beyond age 65 “provide[d] the same labour as they did when they were 64 years of age,” but the former was subjected to the termination of benefits despite the similarities in labour.

Despite the employer’s arguments that Mr. Talos was not disadvantaged because his pensions were “generous” enough to ensure that Mr. Talos could “lead an economically viable life during his senior years,” especially since he was a member of a union, the Tribunal found these factors to be irrelevant to whether Mr. Talos’ s. 15 Charter right to equal compensation in the workplace was infringed.

Nor did the ESA support the employer’s claims that a long career, being part of a profession, and being a member of a union, were “relevant to the statutory protections afforded to all employees” under the ESA and Code. Rather, the Tribunal determined that the ESA establishes “minimum standards for conduct and conditions of employment without regard to an employee’s access to a collective bargaining process.” Thus, the denial of benefits created by the Code was not due to the standards set out in the ESA, but were solely because of Mr. Talos’ age.

Although the employer argued that providing benefits to employees aged 65 and older would challenge the financial viability of workplace benefits, the Tribunal ruled that, when considering all the evidence before it, “the financial viability of workplace benefit plans can be achieved without making the age 65 and older group vulnerable to the loss of employment benefits….”

Thus, the Tribunal concluded that s. 1 of the Charter did not save the infringement of Mr. Talos’ equality rights since:

… the impugned provisions do not minimally impair the rights of these older workers, as an employer is not required to demonstrate that their exclusion from employment benefits is reasonable or bona fide, or justified on an actuarial basis, or because their inclusion would cause undue hardship.

Rather, if the legislature was concerned about financial viability, they could have used “less intrusive means” to address those concerns.

Ultimately, the Talos decision has numerous impacts on both employers and employees. As a result of Talos, if an employee claims that they were discriminated on the basis of age, s. 25(2.1) of the Code can no longer be used as a defence by employers to justify the termination of benefits for those aged 65 and older. Could this mean that employees have a greater ability to maintain their employee benefits beyond the age of 65? We will have to see what future jurisprudence and possible legislative change hold for the future.

By Marty Rabinovitch and Linda Roonafkan

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Devry Smith Frank LLP

Employment and labour lawyers at Devry Smith Frank LLP
Devry Smith Frank LLP (DSF) is the largest full service law firm in Toronto outside of the downtown core. They offer a broad range of legal services to individual, business and corporate clients in most areas of corporate and personal law. Their firm’s employment law group covers a broad spectrum of HR law, including employment and labour law, occupational health & safety, human rights, workers’ compensation and much more.Lawyers at Devry Smith Frank LLP lead by Marty Rabinovitch B.A.H., LL.B. will be covering issues surrounding employment and labour law and human rights on First Reference Talks. They also provide training, seminars and conferences on the above topics. Read more .
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