Is federal sector skirting mandatory retirement?

Debate surrounds 1-year transition period for repeal of mandatory retirement provisions
By Sarah Dobson
|Canadian HR Reporter|Last Updated: 04/24/2012

On Dec. 16, 2011, the federal government repealed sections of the Canadian Human Rights Act (CHRA) and Canada Labour Code that permitted federally regulated employers to impose mandatory retirement in some circumstances.

But there is a one-year transition period before the repeal takes effect. And that is causing some confusion and questionable manoeuvring by federally regulated employers, according to David Whitten, founding partner of Whitten & Lublin in Toronto.

“The amendments to the CHRA have really… created a misconception in some workplaces that this is your opportunity to target older workers.”

When the Canadian Human Rights Tribunal (CHRT) stated in 2009 — in a case involving Air Canada pilots — that capping discrimination at 65 meant, technically, employers could discriminate on the basis of age after 65, “that created a bit of a limbo state for a couple of years because a number of federally regulated employers… continued to have mandatory retirement policies in place,” said Whitten.

“But it called into question whether they were enforceable, whether somebody could bring a successful complaint to the Canadian Human Rights Tribunal on the basis of discrimination of age 65 and above.”

While the government was harmonizing the CHRA with what the Federal Court and CHRT had said, the public was left more confused with the one-year transition, said Whitten.

“Technically, yes, back in 2009, there was a federal court case that examined this but the average member of the public has no idea of what the significance of a ruling of unconstitutionality is, how that affects it when mandatory retirement policies have at least remained on the books since then.”

Few employers were caught up in that guise, if they were savvy enough to know of the 2009 decision, he said, but “it left at least an impression in the federally regulated environment that, ‘Hey, there is an opportunity to deal with older workers above the age of 65 and get rid of them potentially between now until December 2012 because the legislature, Parliament, has given us this ramp period.’”

But this position is ridiculous and a legal loophole does not exist, said Howard Levitt, senior partner of Levitt, employment and labour lawyers in Toronto.

Mandatory retirement in the federal sector was declared unconstitutional by the Federal Court and the CHRT as a violation of the Charter of Rights and Freedoms in 2009. Since then, the Canadian Human Rights Commission (CHRC) has accepted complaints of age discrimination on such grounds.

“This isn’t a contentious area of the law. This law is very well-defined — you cannot mandatorily retire in the federal sector because, as the law presently stands, it’s a violation of the charter,” he said.

Even before that, the Canadian Human Rights Act allowed mandatory retirement only in very specific circumstances, it was never a licence for employers to dismiss employees at 65, said Levitt.

And with the December 2011 amendment, the government was following what the courts had already done.

“It wasn’t required but the government was just being prophylactic,” said Levitt.

The only impact the federal legislation extension to Dec. 31 has is if the Air Canada v. Kelly case reaches the Federal Court of Appeal before December 2012. That decision would also have to overturn the earlier federal court decision by saying it is not a violation of the charter and not merely that retirement for airline pilots, given the highly safety sensitive nature of their jobs, was “a justifiable limitation of an individual’s right to equality,” said Levitt.

“Unless all of that occurs, which is unlikely, the amendment to the federal legislation is irrelevant as it is simply catching up to what the law already is.”

CHRC issues release

But the CHRC was prompted to issue a release in late March clarifying the issue.

With the December 2011 announcement, the government has clearly stated its intention that mandatory retirement should not be allowed, said David Gollob, director of communications at the commission.

And the CHRC has no evidence employers are using the delay before the federal ban on mandatory retirement comes into effect to take advantage of what they might misperceive as an opportunity, he said.

“What we’re saying is, ‘You had the appearance of defence in the law but it’s already been challenged by the federal court as not constitutional, so there are not many legs to stand on here should a complaint about this action come in. It could very well be found to be discriminatory.’”

However, the CHRC has received inquiries on the subject.

“People looked at it, thought, ‘Hmm, what are the implications of the transition period?’” said Gollob. “It was important to clarify the fact that this is not a loophole, this is not an opportunity, should anyone be thinking that it is.”

However, since the 2009 federal court ruling, the commission has received 300 complaints regarding mandatory retirement, he said.

Older workers have been forced out in the banking sector, said Whitten, citing cuts at banks that tend to impact older employees more than younger employees, based on “broader restructuring.” But these claims are very hard to prove when they’re buried amongst group terminations, he said.

Reluctant to name names without breaching the confidence of clients, Whitten said “some smaller, unsophisticated, federally regulated employers still have these policies under the misguided impression that they are enforceable until December of this year.”

While it’s unlikely employers would rely on a mandatory retirement policy across the board because of the federal court decision, he said, “a number of employers (are) operating under the misbegotten assumption that now was their opportunity to target employees over 65. As a result of this, they’ve engaged in some practices that I would say are kind of questionable.”

Instead of being blatant and telling employees they’re too old for the job, companies are using more subtle means, such as putting older employees through a rigorous performance improvement plan or, alternatively, providing a severance package.

“So, basically, you’re putting the older employee in the proverbial rock and a hard place,” said Whitten.

But it’s nonsense to say employers are firing people “en masse,” said Levitt.

“Show me a single federal sector employer since that legislation was passed (that has) created a mandatory retirement policy where they didn’t have one before,” he said. “I don’t know of anyone in the sector who practises mandatory retirement — because the law is that clear.”

In the federal sector, generally, you’re dealing with massive employers, said Levitt, such as Rogers, Shaw, Air Canada or CNR, with the exception of smaller trucking companies — but they have associations, so they know the rules and are very conscious of their reputation.

The idea employers are up to these “tricks” is pure fiction, he said, and when Whitten is talking about mandatory retirement, he really means older workers are being targeted, which is a whole different issue.

“I bet you that there was some mass layoff at some employer and (Whitten’s) creating a plaintiff lawyer’s position that there’s a disproportionate number of older workers in the mix, which is a whole different issue. That’s not a mandatory retirement issue.”

Mandatory retirement is a form of age discrimination, said Gollob.

“Anything that says you’re too old, simply by virtue of your date of birth, could be viewed as age discrimination,” he said.

“Employers who think that they’re in a position to force employees to retire before they’re ready to should consider whether this could in fact lead to a complaint, and if that complaint were to be adjudicated could lead to a finding against that employer.”

The way HR legislation works, age does not have to be the only reason for a termination for it to be a violation, just one factor, said Whitten.

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