The road to an employee’s retirement can be long or short, but legal obligations for employers are the same
Many working Canadians look forward to their retirement years as a time when the worries of their job and commuting are behind them, bills are paid off, and they can take the time to do what they want. As such, one might think most people have a plan as to when that stage of their life will begin.
However, a recent Sun Life survey found only 39 per cent of employees know a year in advance when their retirement date will be.
This means that employees aren’t planning their retirement very far ahead, and employers can’t plan too much in advance for an employee to retire. With mandatory retirement no longer legal, it’s pretty much up to employees to decide when they will retire.
And employers have to be careful that they don’t cross a legal line if they want to know an older employee’s intentions or are dealing with a retirement decision on short notice — courts and tribunals have found that too much inquiring or pressure regarding retirement by an employer on an older employee can amount to age discrimination.
Legal decisions highlight challenges
In 2016, a worker for Manulife Financial decided she would retire rather than learn a new computer system that was scheduled to be implemented. She told Manulife in late September with a written retirement notice that she would be retiring three months later at the end of the year. However, a month later the implementation was suspended indefinitely so the worker changed her mind. She told her supervisor that she no longer wished to retire at the end of the year, but after some back-and-forth with the HR department, Manulife chose to stick with the original plan. The worker was told she no longer needed to come into work after mid-December, so the worker claimed wrongful dismissal.
An Ontario court found the worker’s intention to retire was clear and unequivocal and Manulife accepted it. Though it had the option to accept the worker’s rescission of her notice, it was under no legal obligation to do so and it was free to follow through with the worker’s resignation: See English v. Manulife Financial Corporation, 2018 CarswellOnt 14425 (Ont. S.C.J.).
The above decision can be contrasted with a B.C. case back in the 1980s where an employee indicated an intention to retire in the near future but changed his mind. Though the employer had relied on the employee’s stated intention to retire, there was no formal written notice for the employer to have accepted. A “vague intention to resign in the future” wasn’t definite enough that the employee couldn’t change his mind, the court said. See Tolman v. Gearmatic Co., 1986 CarswellBC 737 (B.C. C.A.).
Another interesting situation arose about a decade ago when an Ontario employer asked a long-term employee about his intentions to retire and the employee responded that he intended to retire at the end of 2012, at which point he would be 70 years old. The employee had previously indicated he had planned to retire at 66, but changed his mind due to his economic circumstances. However, in July 2012 the company put the employee on indefinite layoff due to financial troubles. When the employer provided a portion of the employee’s statutory notice requirements, the employee took this as a termination and filed a claim of wrongful dismissal asking for 24 months’ pay in lieu of notice.
A court eventually granted the employee summary judgment for his full statutory notice requirements, but said a trial would be needed to determine his common law notice. Because of the employee’s stated intention of retiring soon, it was unlikely he would be entitled to a lengthy common law notice, said the court.
“If the dismissed employee has no intention to look for work, but has instead decided to retire, the very purpose for which reasonable notice is required to be given is absent,” said the court in Kimball v. Windsor Raceway Inc., 2014 CarswellOnt 7936 (Ont. S.C.J.). “That is a factor that may well be relevant in assessing what constitutes reasonable notice in this case.”
Retirement can be a smooth process for both employer and employee when a significant amount of advance notice is given. But that’s not always what happens. Staying on top of legal obligations is one way employers can keep things a little less bumpy, even on short notice.
