On December 15, 2011, Bill C-13, An Act to implement certain
provisions of the 2011 budget as updated on June 6, 2011 and other
measures (Keeping Canada's Economy and Jobs Growing Act ),
received Royal Assent.
In addition to implementing a number of tax and related measures
proposed in the 2011 budget, Bill C-13 also amends the Canadian
Human Rights Act (CHRA) to eliminate mandatory retirement for
federally regulated employees. Specifically, Bill C-13 repealed
section 15(1)(c) of the CHRA which permitted mandatory retirement
policies. The Bill also amends the Canada Labour Code to repeal a
provision that denies employees the right to severance pay for
involuntary termination if they are entitled to a pension.
The amendments to the CHRA and the Canada Labour Code come into
force December 15, 2012.
IMPLICATIONS FOR EMPLOYERS AND PRACTICAL CONSIDERATIONS
The elimination of mandatory retirement means that, unless a
federally regulated employer can prove that there is a bona fide
occupational requirement ("BFOR"), it cannot terminate an
individual's employment because of his or her age. Establishing
a BFOR is not an easy task, as it is often very difficult for
employers to show that accommodating a particular worker is
impossible or that the accommodation would amount to undue
With respect to unionized employers, the amendments do not make
any exceptions for unionized workplaces. Accordingly, once the
amendments become law, mandatory retirement provisions in
collective agreements will become unenforceable and employers will
be required to show just cause for the dismissal of all bargaining
unit employees, regardless of age. In effect, the amendments will
supersede any collective agreement currently containing a
compulsory retirement clause.
Any federal employer that currently has a mandatory retirement
policy should carefully consider whether the policy is necessary.
The employer should review the purposes of its program to determine
whether a BFOR defence would be available. The employer should
clearly outline the reasons the program is necessary considering
the nature of its business. Alternative measures, such as increased
monitoring or testing of older workers, should be considered to
determine if there are "less intrusive" means to
accomplish the objective.
It is worth noting that Bill C-13 does not prohibit the use of
early retirement incentives as a method of workforce reduction.
Accordingly, one alternative is to develop a voluntary retirement
incentive. Since they do not require older workers to retire,
voluntary retirement incentives do not attract the same human
rights scrutiny as do mandatory retirement. The voluntary
retirement incentive must be developed carefully, to ensure that it
is sufficiently attractive to appeal to enough employees to achieve
the employer's purpose, but is not so broad or attractive as to
result in too many skilled and experienced workers leaving at one
With respect to pension and benefits, no amendments have been
made to the Canadian Human Rights Benefit Regulations, which
currently provide a number of exemptions relating to employees'
participation in certain pension and benefits plans, and expressly
exempt these pension and benefits plans from age discrimination
claims. Having said that, it is important that employers carefully
review their benefit policies to ensure that nothing in the
eligibility criteria requires retirement at any particular age.
While pension plans, in particular, often use age 65 as a
"normal retirement age" for the purposes of valuation,
nothing in the plan documents should translate the definition of
"normal retirement age" into a requirement to retire at a
Unfortunately, reasonable accommodation for employees in the workplace continues to be the source of significant litigation and even today we continue to see outrageous examples of employers behaving badly.
We are now beginning to see reported cases involving charges and subsequent fines laid against employers for failing to provide information, instruction and supervision to protect a worker from workplace violence.
On October 13, 2016, the Supreme Court of Canada denied leave to appeal an Ontario Court of Appeal decision which ordered an employer to pay a former employee 37 months of salary and benefits following termination.
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).