Downsizing has become synonymous with early retirement. Companies trying to reduce headcount usually look to older workers to leave the organization, offering up attractive severance packages, but there is a thin line between voluntary and involuntary dismissal, according to the Ontario Human Rights Commission (OHRC). If an employer crosses over that line, an age discrimination lawsuit could ensue.
A recent discussion paper produced by the OHRC, Human rights issues facing older persons in Ontario, stated some businesses are pushing out older workers to achieve downsizing objectives and many employers don’t even realize they’re doing it.
Faced with the possibility of losing their jobs altogether, many older workers may feel compelled to accept retirement, the report said.
“There is a significant amount of stereotyping of older workers and when there is any kind of downturn in the economy, they (employers) turn to retirement,” said diversity expert Lynne Sullivan, president of Lynne Sullivan and Associates.
Sometimes it may be months after they’ve signed on the dotted line that they realize this is not what they want, said Mark Hart, lawyer and partner in the firm Sanson and Hart.
“There is all this pressure (at the time) and they say ‘Okay, I’ll take it,’ and then six or eight months later they say ‘This wasn’t a good decision,’” he said. That’s when they seek legal advice and find out it could be regarded as age discrimination.
This kind of discrimination does not seem to evoke the same sense of moral outrage as discrimination based on race, creed and national origin, the OHRC paper stated. Arbitrator and mediator Barry Fisher said that’s why many employers do or say things during the downsizing process that can add up to age discrimination, but their awareness of it is low.
“Age is more benign, it’s not as insidious as race,” he said. “You’ll hear comments like ‘He’s close to retirement,’ or ‘we need new blood in here.’”
The Ontario Human Rights Code prohibits discrimination in employment based on age and while it may be difficult to prove the link between age and the reason for termination, when allegations are made most cases get settled out of court.
“Employers want to avoid human rights actions like the plague,” said Adrienne Campbell, a lawyer with Hewitt Associates. “To take a wrongful dismissal case to court is costly. As an employer, unless you’re trying to make a point, there’s no sense in (going to court).”
What it all boils down to, where employers go wrong, said Fisher, is in the criteria process.
“It’s common not to have a criteria for selecting who stays and who goes. Ultimately, it’s left up to the manager and no guidance is given.”
So when an employee asks “Why me?” there is no legitimate answer, said Fisher.
There needs to be valid criteria, a relationship between what you’re trying to achieve through downsizing and the criteria you’re developing, said Hart.
“If the guides aren’t as objective as possible, then you’re opening yourselves up for biases and creating the potential for adverse impact on older workers,” he added.
Performance is a valid way to determine criteria, but even that method can get skewed if not done right. Last year, Ford Motor Co. was in the spotlight for two age discrimination class action lawsuits. It was claimed the company’s management performance system discriminated against older, white males by giving a disproportionate number of them lower grades to meet an unfair quota. Employees were ranked by a letter-grade system (A, B or C) and the quota specified that at least five per cent of employees receive a C grade. Two consecutive C grades meant dismissal.
In response to the complaints, Ford changed the evaluation process and removed all quotas.
For employers to avoid massive age discrimination liability such as the case with Ford, they have to make sure that their criteria for selection is carefully vetted for biases.
Many older workers don’t mind retiring early, but want to feel like they have a choice. There is a less volatile way to address voluntary leave, said Hart. If you can offer the voluntary retirement package to all your employees through a written documentation, with an indicated response deadline, and a contact who can provide objective information, employees can make their own decisions with no pressure from management.
“It’s easy to put together an information kit, give them a contact to get in touch with and then let people make up their own minds...instead of weeding out the older workers. That’s the best way to approach it,” he said.
A recent discussion paper produced by the OHRC, Human rights issues facing older persons in Ontario, stated some businesses are pushing out older workers to achieve downsizing objectives and many employers don’t even realize they’re doing it.
Faced with the possibility of losing their jobs altogether, many older workers may feel compelled to accept retirement, the report said.
“There is a significant amount of stereotyping of older workers and when there is any kind of downturn in the economy, they (employers) turn to retirement,” said diversity expert Lynne Sullivan, president of Lynne Sullivan and Associates.
Sometimes it may be months after they’ve signed on the dotted line that they realize this is not what they want, said Mark Hart, lawyer and partner in the firm Sanson and Hart.
“There is all this pressure (at the time) and they say ‘Okay, I’ll take it,’ and then six or eight months later they say ‘This wasn’t a good decision,’” he said. That’s when they seek legal advice and find out it could be regarded as age discrimination.
This kind of discrimination does not seem to evoke the same sense of moral outrage as discrimination based on race, creed and national origin, the OHRC paper stated. Arbitrator and mediator Barry Fisher said that’s why many employers do or say things during the downsizing process that can add up to age discrimination, but their awareness of it is low.
“Age is more benign, it’s not as insidious as race,” he said. “You’ll hear comments like ‘He’s close to retirement,’ or ‘we need new blood in here.’”
The Ontario Human Rights Code prohibits discrimination in employment based on age and while it may be difficult to prove the link between age and the reason for termination, when allegations are made most cases get settled out of court.
“Employers want to avoid human rights actions like the plague,” said Adrienne Campbell, a lawyer with Hewitt Associates. “To take a wrongful dismissal case to court is costly. As an employer, unless you’re trying to make a point, there’s no sense in (going to court).”
What it all boils down to, where employers go wrong, said Fisher, is in the criteria process.
“It’s common not to have a criteria for selecting who stays and who goes. Ultimately, it’s left up to the manager and no guidance is given.”
So when an employee asks “Why me?” there is no legitimate answer, said Fisher.
There needs to be valid criteria, a relationship between what you’re trying to achieve through downsizing and the criteria you’re developing, said Hart.
“If the guides aren’t as objective as possible, then you’re opening yourselves up for biases and creating the potential for adverse impact on older workers,” he added.
Performance is a valid way to determine criteria, but even that method can get skewed if not done right. Last year, Ford Motor Co. was in the spotlight for two age discrimination class action lawsuits. It was claimed the company’s management performance system discriminated against older, white males by giving a disproportionate number of them lower grades to meet an unfair quota. Employees were ranked by a letter-grade system (A, B or C) and the quota specified that at least five per cent of employees receive a C grade. Two consecutive C grades meant dismissal.
In response to the complaints, Ford changed the evaluation process and removed all quotas.
For employers to avoid massive age discrimination liability such as the case with Ford, they have to make sure that their criteria for selection is carefully vetted for biases.
Many older workers don’t mind retiring early, but want to feel like they have a choice. There is a less volatile way to address voluntary leave, said Hart. If you can offer the voluntary retirement package to all your employees through a written documentation, with an indicated response deadline, and a contact who can provide objective information, employees can make their own decisions with no pressure from management.
“It’s easy to put together an information kit, give them a contact to get in touch with and then let people make up their own minds...instead of weeding out the older workers. That’s the best way to approach it,” he said.
