No benefits past 65? That’s discrimination

Ontario decision comes long after restrictions around mandatory retirement


In 2006, Ontario’s Human Rights Code was changed to protect employees against discrimination on the basis of their age, such as hiring, promotion, training or termination — including mandatory retirement.

But, for some reason, employee benefits didn’t warrant the same protection.

Fast-forward to 2018 when the Human Rights Tribunal of Ontario (HRTO) decided that code, and related provisions in the Employment Standards Act, amounted to age discrimination and violated the Canadian Charter of Rights and Freedoms.

“It’s a very big decision, that we’ve waited for for a long time,” said Anneli Legault, a partner at Dentons in Toronto.

“It was an inevitable challenge. The government almost set it up to be challenged at some point,” she said. “Because they were so honest, they actually said, when they passed the mandatory retirement abolishment, they were worried about the financial viability of benefit plans. So they were allowed to not give benefits to everyone.”


The case concerned Wayne Talos, a teacher at the Grand Erie District School Board in Brantford, Ont., whose extended health, dental and life insurance benefits ended when he turned 65, though he was still working full-time.

Talos alleged the exception in the Human Rights Code infringed his equality rights and was unconstitutional, and he sought monetary compensation of $160,000 for lost benefits and compensation for injury to dignity, feelings and self-respect.

In its decision, the tribunal looked extensively at Bill 211, the “Act to amend the Human Rights Code and certain other acts to end mandatory retirement” which was intended to end the upper limit on age when it came to involuntary retirement, but “preserved the ability to employers to provide differential benefits and pension plan contributions for workers 65 and older in a bid to maintain the financial viability of those plans.”

This “carve-out” was questioned by HRTO associate chair Yola Grant in her May 18 decision:

“I find that the policy choice to carve out workers age 65 and older relied on the insurance industry’s expectation of costs increases, an expectation that was not empirically supported in 2005. This policy choice by the legislature ignored ‘independent’ research that indicated little change to the cost of benefit plans in Manitoba and Quebec post-mandatory retirement.”

Bill 211’s purpose to maintain the financial viability of various benefits and pension plans was not supported by any empirical evidence concerning the proportion of workers who would likely remain active after age 65, said Grant, or whether maintenance of these plans would be cost-prohibitive, or age differentiation in benefits was necessary to ensure the viability of the group insurance plans.

And since then, more credible actuarial data shows there is no “steeper curve” in costs for workers 65 and older, and “the policy choice to exclude workers age 65 and older from equal protection in employment benefits appears arbitrary and not ‘within a reasonable range of choices’ to which this tribunal should accord deference,” said Grant.

There are various ways to manage plan costs should increases become unsustainable, she said, so “the legislature could have devised a less intrusive means to meet the objective of maintaining the financial viability of workplace group benefit plans.”

“The age 65 and older group need not be made vulnerable to the loss of employment benefits without recourse to a (quasi-constitutional) human rights claim in order to ensure the financial viability of workplace benefits plans. The government’s age limit of 65 for protection from discrimination in the provision of benefit and insurance plans appears unacceptable given the cogent evidence to the contrary that there is no close link to costs and age,” said Grant.

“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.”

Concerns about costs

Back in 2005, there was an assumption it would potentially be too expensive to provide full benefits to workers 65 and older, said Bruce Ryder, an associate professor and academic director of the anti-discrimination intensive program at Osgoode Hall Law School in Toronto.

But this recent decision focused on the fact that “the regulations and the Employment Standards Act, which allow discrimination against workers 65 and older with respect to benefits plans, is a total exclusion of the right to have discrimination issues considered. And the Human Rights Code provision, which (Grant) has found unconstitutional, basically eliminates the possibility of raising the issue with the tribunal, and that’s why it was found unconstitutional.”

“It tidies up really what should have been addressed back then.”

In 2005, it was an intentional decision when the Ontario government specifically excluded benefits, said Legault.

“They abolished mandatory retirement, saying, ‘Oh, that’s age discrimination,’ and they purposely and intentionally said we are not touching the benefits section,” she said, adding there could be another challenge at some point around workers’ compensation for the same reason.

But with this decision, and the extension of benefits past 65, more people might choose to work past that age, said Legault.

“That will then mean those actuarial numbers… are going to be wrong because they were trying to say, ‘Don’t worry, there aren’t that many (older workers), the cost isn’t going to be that high,’ but if you have all the people who desperately need benefits self-selecting to stay on and get in the benefits plans, I think the cost may very well be higher than what the tribunal anticipated.”

The decision really recognizes that there are more older people working now, said Renu Mandhane, chief commissioner at the Ontario Human Rights Commission in Toronto, “and that they should be treated equally compared to younger workers. And to that extent I think the decision really sends the message that older workers are valuable, it disrupts stereotypes about their capabilities and their worth in the workplace, and it recognizes that they make a contribution to the workplace and they should not receive less compensation as a result of their age.”

Implications for employers

Many employers across Ontario may be required to change group health, dental and life insurance benefit plans if they offer fewer or no benefits to employees age 65 and older compared to younger employees, according to the OHRC.

“Employees should not face blanket exclusions because of their age: instead, age-based distinctions in benefits should be based on accepted insurance practice and credible actuarial data.”

It will now be up to employers to consider where their benefits plans may raise human rights issues, said Mandhane.

“They should look at their benefits plans and ideally obtain legal advice in terms of how the decision in Talos may affect the eligibility for older workers in their workplace.”

The Talos decision is not saying any differential treatment of older workers in benefits plans will violate the code, said Ryder, “but there has to be a right to raise those issues, and there has to be a more nuanced approach, and employers will have to justify any differential treatment of older workers as bona fide occupational requirements, and show that the different treatment is necessary to maintain the sustainability of the benefits plan, and that a more generous approach would amount to undue hardship.”

While there might be adjustments to the scope of an employer’s benefits in order to sustain the sustainability of a plan, “to have a complete denial of benefits if you turn 65 will be very difficult for the employer to justify,” he said, adding the issue will also have to be addressed in collective agreements to make sure they’re brought into compliance.

In unionized environments, employers may now argue they have to cover more people with less, rather than few people with more, so “there will be certainly be some interesting bargaining going on,” said Legault. “For non-union (workplaces), it’s up to the employer to do the costing but still try to keep good employee relations and good employee morale.”

Really, it’s the insurance companies that write the policies selected by employers, she said.

Several insurance companies are reviewing this decision, according to Craig Anderson, vice-president and general counsel at the Canadian Life and Health Insurance Association in Toronto.

“With more people working longer and putting off retirement, employers and insurers continue to look at their benefit plans to ensure they meet the needs of a changing society.”

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