When mandatory retirement was eliminated, I noted that this change might create some interesting HR issues for employers of older workers. In the past, employers were often in a position to tolerate declining performance, comfortable in the knowledge that the employment relationship had a fixed “end date.” As a result, they could allow the employee to work out their last few years and retire with dignity.
Unfortunately, the ban on mandatory retirement means that employers may find themselves with an older worker who is not performing up to par and who will continue to be employed indefinitely. At that point, unless the employer is willing to tolerate the declining performance, it will have to take action, perhaps including performance improvement plans and progressive discipline. In addition to the potential impact upon morale, as workers see a senior employee being coached or disciplined, your actions can also have legal and human rights implications. Simply put, if the decline in performance is related to the employee’s age, then any adverse consequences could, arguably, be based upon a prohibited ground and therefore a breach of the applicable human rights legislation.
This issue was recently considered by the New Brunswick Court of Queen’s Bench in the case of Malik v. New Brunswick Human Rights Commission and Brunswick News Inc. In that case, the employee turned 65 after 34 years of service. There was a collective agreement in place that provided as follows:
The employer may discharge [an employee] … if an employee who has attained normal retirement age, fails to meet the performance standards expected for his position, such determination and assessment to be at the discretion of the employer, then the employer has the right to release that employee from employment.
The employer took the position that the employee had failed to meet the applicable performance standards for his position. Unfortunately, the evidence disclosed that there were no performance issues on his record aside from some relatively minor warnings.
Interestingly, when the employee’s dismissal was challenged before the Human Rights Commission, the commission dismissed the complaint on the basis that the collective agreement allowed for such a termination. The commission found that there were ongoing performance issues and attitude problems, and that the employer had warned the employee about termination if those problems continued. As a result, the commission did not find the dismissal to be a contravention of the legislation.
The matter was appealed, and the Court found that the commission’s decision was unreasonable.
The Court specifically found that the clause in question was prima facie discriminatory on the basis of age, and the question of whether there was a bona fide occupational requirement had not even been considered. As a result, the matter was sent back to the commission for additional consideration.
We will have to await the commission’s decision, as well as other claims arising out of this type of scenario, which is likely to become more common with the demise of mandatory retirement.
Miller Thomson LLP
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