On June 7, the Ontario government tabled a bill to end mandatory retirement.  With one exception, the Bill would come into force one year following Royal Assent. This is the second time such a bill has been tabled in Ontario. This Communiqué will be of interest to Ontario employers.

Employment generally

The Ending Mandatory Retirement Statute Law Amendment Act, 2005 (“Bill”) would amend the Human Rights Code to extend protection against age discrimination to persons age 65 and over (“older persons”). Unless the characteristics of a job reasonably require termination at some specified age, as may be the case for firefighters, pilots, police personnel and similar occupations, employees will be entitled to insist on a continuation of their employment, whether or not a collective agreement provides otherwise.

Employers will be able to terminate an employee for poor performance, but they bear a heavy onus of proof. As a practical matter, in the absence of greatly improved job monitoring and assessment, employers may be forced to provide statutory and common law severance payments to older persons.

Pension plans

Pension plans are unaffected. They will continue to be regulated by the Pension Benefits Act.

Other benefit plans

The current law is generally considered to allow age-based restrictions, with respect to older persons, in benefit plans. The Bill may be awkwardly drafted and may need to be changed to reflect government policy. That policy is to continue to allow benefit plan age-based restrictions. For example, an employer could choose to terminate benefit plan participation after age 64. Alternatively, it could choose to provide lesser benefits to older persons. Effective on royal assent, the Workplace Safety and Insurance Act will be exempted from the Human Rights Code. This means that workers’ compensation will not be available to older persons.

Duty to accommodate

Employers are under a duty to accommodate employees with disabilities before they may seek to terminate employment. The legislation does not relieve employers of that duty for employees over age 64.

Comment

The Bill will force employers to continue to employ older persons, except in cases where employers can demonstrate that those older persons cannot reasonably perform the duties of their employment. In determining capability to perform, employers may be forced to accommodate age-based disabilities. While it is not expected that many older persons will seek to continue employment, those who do may impose a significant financial burden on reluctant employers.

Recognizing this increased employer cost, the Ontario government will not require continued benefit plan participation for older workers. In addition, the rules governing age discrimination now in place for benefit plans are a labyrinth of inconsistent rules.  Employers will not need to pay to find their way through that labyrinth.

The government should modify the legislation to set the limits of the duty to accommodate. It should consider the approach taken in the United States, which relieves employers entirely of that duty. If there is no change, this seems a likely source of litigation.