Mandatory retirement changes leave Ontario workers in limbo

Changes take effect in December, but what happens to workers turning 65 in the meantime?

When the Ontario government announced it was abolishing mandatory retirement at age 65 at the end of 2006, employers with such policies began to prepare for the changes. But one pressing question didn’t have a clear answer: What happens to employees turning 65 between the time the change was announced and Dec. 29, 2006, when the change takes effect? Employers were left in a bit of limbo as to what to do with these workers. A court challenge by an employee in Welland, Ont., could soon provide an answer.

Technically, employers can still retire employees according to the policy but Wilde v. Welland (City), a recent decision by the Ontario Superior Court of Justice, illustrates that courts may not necessarily agree.

On Dec. 5, 2005, Norman Wilde, a fleet supervisor with the City of Welland, received a memo in which it was drawn to his attention that the long-standing policy of the city was that the retirement age was 65 and that this was in compliance with the Ontario Human Rights Code. The employee requested a continuation of his employment past that age due to the fact the provincial government had just amended the code to end mandatory retirement on Dec. 29, 2006. The city refused to continue his employment.

Wilde brought an injunction to restrain the City of Welland from terminating or purporting to terminate his employment prior to the hearing of the application. The injunction was heard on May 19, 2006. The employee turned 65 on June 2, 2006.

The injunction was heard by Justice William Festeryga, who granted Wilde’s request for an injunction. A motion was then filed with the Ontario Superior Court of Justice for leave to appeal that ruling to the Divisional Court. Justice Barry Matheson heard that case.

In reviewing Justice Festeryga’s decision, Justice Matheson considered the relative strength of Wilde’s case. The court said that if the provincial government had not passed the amendment, there would be little strength to Wilde’s case. However, given that it had, the question arose as to what employers with a mandatory retirement policy at age 65 should do between now and Dec. 29, 2006.

The court found that despite the fact mandatory retirement was to be abolished at the end of the year, the city’s position was consistent with a number of other cases in preserving the status quo. In particular, the court found Justice Festeryga’s decision was at variance with the status quo in age-retirement cases and granted leave on that basis.

In his ruling granting the injunction, Justice Festeryga argued that damages would not provide Wilde with an adequate remedy.

“I say he stands to lose self-esteem, self-worth and self-respect,” said Justice Festeryga. “At age 65, who will hire him?”

But Justice Matheson didn’t agree with that opinion. He said that, if Wilde were ultimately successful, he would be fully compensated in damages. Justice Matheson granted the appeal to the Divisional Court.

“I find that this is an important matter that requires more input by a higher court,” said Justice Matheson. “The Divisional Court or other will be able to deal with the new legislation and how to apply the law before it is the law of the land.”

The employer told the court that it would allow Wilde to continue in its employment until the end of June.

“Possibly, the (city) is coming up with a policy as to how to deal with its employees after the act comes into full force and effect,” Justice Matheson said.

At this point, it is possible the Divisional Court may fully disagree with the Ontario Superior Court of Justice’s finding. We should stay tuned for its decision, as it will undoubtedly answer the important question of how to deal with employees where there is a mandatory retirement policy prior to Dec. 29, 2006. In the interim, employers should proceed cautiously and carefully to ensure this dicey issue is navigated correctly.

For more information see:

Wilde v. Welland (City), 2006 CarswellOnt 3398 (Ont. S.C.J.)

Natalie MacDonald is a partner with Grosman, Grosman & Gale, a Toronto-based law firm specializing in employment law. She can be reached at (416) 364-9599 or [email protected].

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