Decision potentially affects standards of declining pension plan compensation after a certain age
In a landmark ruling, a Quebec workers’ compensation tribunal has ruled reducing injured workers’ income replacement benefits, including reduction at the traditional retirement age of 65, offends both provincial human rights legislation and the Charter of Rights and Freedoms.
In the decision Côté v. Traverse Rivière-du-Loup, St.-Saint-Siméon, the tribunal held Quebec’s workers’ compensation legislation discriminated against workers on the basis of age and, as a result, it was in breach of the Quebec Charter of Human Rights and Freedoms and the Canadian Charter of Rights and Freedoms.
The case involved Bernard Côté, a 64-year-old worker who was injured on the job. His entitlement to workers’ compensation payments was reduced by 25 per cent from the second year of the date of his disability, by 50 per cent from the third year and 75 per cent from the fourth year of his entitlement. This was based on the schedule of declining benefits set out in the legislation. Côté argued this age-based reduction was discriminatory under the relevant charter provisions.
In this decision, the tribunal reviewed the workers’ compensation legislation and its establishment of a distinct rule based on the traditional retirement age of 65. The tribunal made a political statement in commenting that this arbitrary, but traditional, retirement age “perpetuated the myth about older persons’ ability to work and this is discriminatory.”
Interestingly, evidence presented by the attorney general of Quebec showed the average retirement age of workers in Quebec is just in excess of 59. Therefore, it was argued to be quite reasonable to expect a reduction in income, whether at work or on workers’ compensation benefits, by a claimant such as Côté.
The attorney general argued the reduction in benefits was an acceptable and reasonable compromise based on the reality of the average retirement age and the need for certainty in funding of the workers’ compensation system. These arguments were ultimately rejected by the tribunal.
In further defending the legislative provision, the attorney general argued the income replacement benefits reduction was justifiable under the Charter of Rights and Freedoms for the following reasons: The traditional retirement age of 65 was justifiable and otherwise reasonable given the nature of funding of the workers’ compensation system in Quebec and the traditional retirement age, and should therefore be “saved.”
This decision has been sent to judicial review to Quebec Superior Court. Judicial review is a narrow form of review by a higher court that requires a jurisdictional error or a decision that is patently unreasonable. Judicial review is not a full right of appeal with respect to the facts and legal issues of the case.
The decision of the tribunal in Quebec, subject to being overturned on appeal, has very broad implications. First, this decision potentially affects standards of declining compensation provided by pension plans to reduce or eliminate benefits at a certain age. Further, more broadly, the reduction of benefits based on age, and a presumptive retirement age of age 65, exist in other Canadian jurisdictions under workers’ compensation legislation and pension legislation.
There is also a case before the Supreme Court of Canada, originating in British Columbia, that is examining pension plans and benefit reduction based on age. The B.C. Court of Appeal held such a distinction based on age was not discriminatory, per se, in reducing pension entitlement on the basis of age and presumptive retirement age. It remains to be seen how the Supreme Court of Canada will address the issue.
The tension between traditional retirement ages and the funding of pension and other state compensation systems with the legal prohibition against age discrimination in human rights legislation and the charter are profound. This issue could impact many Canadian jurisdictions with respect to both pension and workers’ compensation legislation. It also highlights the tension between the need to properly predict and calculate the funding of workers’ compensation and pension systems across Canada.
The financial viability and certainty for those receiving benefits from workers’ compensation systems and pension plans is critically dependent on the ability to properly fund both systems. These cases may have significant implications for that important, societal issue.
Norm Keith is the occupational health and safety practice leader at the law firm Gowlings in Toronto. He can be reached at (416) 862-5699 or [email protected].
