Notice of retirement

Can an employer require a certain amount of notice of an employee's intention to retire?

Notice of retirement
Tim Mitchell

Question: Can an employer require a certain amount of notice of an employee’s intention to retire? Are there any legal requirements for the notice requirement?

Answer: Retirement is one way that an employment contract can be terminated by an employee. Employees are expected to provide reasonable notice of their intention to retire just as they would be expected to if they were resigning. The primary purpose behind the notice requirement is to allow an employer a reasonable opportunity to hire and train a replacement or make arrangements to minimize any loss or disruption to its business operations.

The requirement for employees to provide notice of their intention to retire can be in both statute and at common law. For example, the Alberta Employment Standards Code specifies that an employee that has been employed more than 90 days but less than two years must give at least one week’s notice. Employees that have been employed for two or more years must give at least two weeks’ notice. Similar employment standards legislation exists in every jurisdiction.

In addition to the minimum standards specified in provincial employment standards legislation, the amount of notice required from employees that intend to retire may be lengthened by the employment contract. While there is not a cap on the amount of time an employer can require as retirement notice, employers should not implement, or attempt to enforce, unreasonable contractually required notice periods. Courts have been clear that the notice periods required of departing employees are not the same length as the notice required of employers when terminating employees. Factors that the employer may want to consider are: the nature of the employee’s position, the length of the employee’s service and what amount of time it may reasonably take to hire and train an incumbent. The appropriate notice period would be different for an hourly laborer versus an executive of a company.

Similar to resignation, an employee’s notice of their intention to retire must be clear, unequivocal and voluntary. It must objectively reflect the intention to resign. Casual discussions regarding an employee’s intention to retire will generally not be considered clear and unequivocal. Moreover, forced or mandatory retirements will not be considered voluntary and may be in violation of human rights legislation.

Further, employers may consider implementing appropriate policies regarding notice of retirement that specify the amount of notice required, the requirement of getting the notice in writing, meeting with the employee and discussing next steps (similar to an exit interview). While an employee may be entitled to change their mind before their retirement date, only if the employer has not already detrimentally relied on the expressed intention to retire, taking formal steps to recognize and process the retirement may help establish that notice was clear, unequivocal and voluntary.

Overall, employees wishing to retire must be aware of the minimum statutory notice requirements to end the employment contract and adhere to any contractually stipulated notice requirements.

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