Discrimination risks make it dangerous to assume an older worker is considering retirement without confirmation
By Jeffrey R. Smith
The population of Canada — and a large part of the Western world, for that matter — is aging.
The baby boom generation is reaching senior citizen status and subsequent generations don’t have the numbers to keep up demographically. As a consequence, the workforce is aging as well — something that has become more pronounced in Canada due to the abolishment of mandatory retirement in jurisdictions across the county. Workers in most jobs are free to work for as long as they want or are able and employers risk discrimination complaints if they try to push employees to retire.
Employers can also get into trouble by making assumptions based on an employee’s age. Just because an employee has reached an age where retirement is an option, it doesn’t mean she doesn’t want to continue working. Even suggesting as such to the employee could be seen as exerting pressure or trying to influence the employee’s free will in making the decision. Proceeding as if the employee was expected to retire when the employee hasn’t made any indications of her intentions is also a bad idea.
A recent case heard by the Ontario Superior Court of Justice showed the error of making such assumptions. Four years ago, Quebec-based company Air Liquide purchased the shares of one of its Ontario distributors, taking full control of the smaller company.
The purchase was made under an agreement signed in 1996, which gave Air Liquide first right to purchase the distributor if its founder decided to sell. In exchange, Air Liquide guaranteed the founder’s three sons — who all held significant positions with the distributor company — jobs for at least three years after the transaction. No such provision was made for the founder and his wife, who were in their 80s.
A few days after the sale was final in 2009, Air Liquide terminated the employment of the founder and his wife, who had run the company for 40 years until their eldest son took over the previous year. Air Liquide claimed that when no provision for their continued employment was made in the agreement, it assumed they would be retiring due to their advanced age. The couple said this wasn’t the case and filed a wrongful dismissal claim.
The court sided with the couple, finding there was no reason in today’s employment climate to assume someone in their 80s wanted to retire without a clear statement from that person. Though they each had four decades of service with their company, they limited their claim to 18 months’ reasonable notice, which still amounted to more than $1.1 million for the two of them, based on their salaries for the previous five years.
People no longer have to retire at 65. While many workers like to retire earlier if they can, many others prefer to work into their late 60s, 70s or even 80s, such as the couple in the case above. And as long as they continue to do their job, employers don’t really have a say in the decision to retire.
Jeffrey R. Smith is the editor of Canadian Employment Law Today, a publication that looks at workplace law from a business perspective. He can be reached at firstname.lastname@example.org or visit www.employmentlawtoday.com for more information.