Canada: An Update On Mandatory Retirement

Last Updated: December 21 2012
Article by Ian Breneman and Level Chan

Although blanket rules allowing mandatory retirement have been removed from human rights legislation for some time, there continue to be mandatory retirement cases. The recent Nova Scotia decision in CSAP v. CUPE, Local 2272, summarized on our blog, is the most recent case from Atlantic Canada.

Background – human rights legislation and mandatory retirement

Like other human rights legislation, Nova Scotia's Human Rights Act (the "Act") prohibits age-based discrimination in the workplace. As mandatory retirement treats employees differently based on their age, it is discriminatory. Until July 2009, there was an exception in the Nova Scotia Act for a "bona fide plan, scheme or practice of mandatory retirement" (Section 6(h)), but that Section of the Act was repealed at a time when other provinces made comparable changes to "eliminate" mandatory retirement.

The news of the total elimination of mandatory retirement was greatly exaggerated since other exceptions remained. First, employers can apply mandatory retirement (and have) if it is a bona fide occupational requirement. Second, there is another exception that may allow employers to continue the practice of mandatory retirement for the "operation of a bona fide retirement or pension plan or the terms or conditions of a bona fide group or employee insurance plan" (Section 6(g)). Section 6(g) allows a mandatory retirement policy if it is connected to "the operation" of a pension plan scheme. But, what sort of connection is required to invoke Section 6(g)? The answer to this question is relevant to Atlantic Canadian employers across the region as legislation in all four provinces have rules that are similar to Nova Scotia's Act.

Meanwhile, the federal human rights statute – the Canadian Human Rights Act – also had a provision similar to the now repealed Section 6(h) in the Nova Scotia Act. However, it has been challenged as being unconstitutional under the provisions of the Charter of Rights and Freedoms and, as part of the implementation of the 2011 budget, will be repealed on December 15, 2012.

What courts and tribunals have said

In 2008, the Supreme Court of Canada decided in New Brunswick (Human Rights Commission) v. Potash Corporation of Saskatchewan Inc. ("Potash") to allow a mandatory retirement policy based on provisions of the employer's pension plan. The New Brunswick Human Rights Act has a unique provision that allows termination of employment "because of the terms of any bona fide retirement or pension plan". In the potash case, the Supreme Court of Canada held that mandatory retirement was allowed so long as it was part of a legitimate or genuine retirement or pension plan (i.e., not a "sham").

The Nova Scotia Act poses a similar, yet different, conundrum as provincially regulated employers may arguably have a mandatory retirement practice related to the operation of a bona fide pension plan or group or insurance plan, which usually hinge on a defined "normal retirement age".

In Talbot v. Cape Breton Regional Municipality and Canadian Union of Public Employees (2009) ("Talbot"), an employee facing the operation of a mandatory retirement scheme brought a complaint to the Nova Scotia Human Rights Commission. At the time, the employer had a pension plan that was described as "in good shape." Following Potash, the Board of Inquiry held that, because the pension plan was "legitimate and genuine" and "not a sham" (i.e., bona fide), the employer was entitled to enforce its mandatory retirement scheme.

However, in Nilsson v. UPEI (2010), the Prince Edward Island Human Rights panel held that more was required because of the term "operation" in its Human Rights Act (similar wording as Nova Scotia's Section 6(g)). The panel determined that a mandatory retirement age of 65 was not an integral part of the operation of UPEI's pension plan. Therefore, the University's mandatory retirement policy could not be exempted from that province's Human Rights Act.

The recent decision of a Nova Scotia labour arbitrator followed the approach taken in the Nilsson decision rather than Talbot. In Conseil Scolaire Acadien Provincial v. Canadian Union of Public Employees, Local 2272 (2012), the employer, CSAP, allowed its employees to work past the age of 65, in part based on an earlier human rights case (Theriault (2008). In a somewhat bizarre reversal of roles, the union alleged that CSAP violated a mandatory retirement provision in the collective agreement by allowing employees to work past age 65, arguing in favour of mandatory retirement.

CSAP argued that the mandatory provision in the collective agreement may have been exempt from the Act before Section 6(h) was repealed. CSAP further argued that, as there was no link between the mandatory retirement clause and CSAP's pension plan, the Section 6(g) exemption could not apply. The union argued that the mandatory retirement clause was directly related to CSAP's pension plan, meaning that Section 6(g) applied.

The arbitrator concluded that there was no link between the mandatory retirement clause and the pension plan that would engage Section 6(g) and save the mandatory retirement clause. In coming to that conclusion, the arbitrator took the following factors into consideration:

  • The mandatory retirement clause did not reference the pension plan;
  • The pension plan did not make a reference to a retirement age of 65;
  • The pension plan was drafted when the collective agreement (and its mandatory retirement clause) was already in place; and
  • Pension plan participation was not mandatory, but retirement at 65 was mandatory.

This decision suggests that meeting more than the "no sham" test may be required in Nova Scotia.

Federally-regulated employers

For federally-regulated employers, there is no "bona fide pension plan" exception. Specific regulations have been established for pension and benefit plans that do not allow for broader interpretation so as to apply to mandatory retirement. However, Section 15(1)(c) of the Canadian Human Rights Act ("CHRA") provides (until after December 15, 2012) that it is not a discriminatory practice to terminate an individual's employment where that individual "has reached the normal age of retirement for employees working in positions similar to the position of that individual".

In Air Canada Pilots Association v. Kelly, 2012 FCA 209 ("Air Canada"), two pilots formerly employed by Air Canada were required to retire at age 60 based on provisions in their collective agreement and pension plan. The pilots filed a complaint with the Canada Human Rights Commission alleging that Section 15(1)(c) of the CHRA violates the Charter of Rights and Freedoms.

Mandatory retirement has previously been held by the Supreme Court of Canada as not violating the Charter. In 1990, the Supreme Court held that provisions of the Ontario Human Rights Code, 1981 that exempted mandatory retirement schemes were constitutional (McKinney v. University of Guelph, [1990] 3 SCR 229 ("McKinney")).

In the latest of a series of decisions, the Canadian Human Rights Tribunal and the Federal Court both determined that Section 15(1)(c) of the CHRA was contrary to the Charter. The Federal Court of Appeal, however, held that it was bound by the Supreme Court's decision in McKinney, meaning that the provision was upheld as constitutional. Leave to appeal that decision to the Supreme Court of Canada has been sought.

What this means for you

Mandatory retirement has not been eliminated. It still causes controversy even though human rights legislation has been amended to make it more difficult to defend. While a mandatory retirement requirement is not valid on its own without justification, employers (or unions) may still seek to justify it based on a bona fide occupational requirement or, in some provinces, as part of the operation of a pension plan or other retirement benefit program. In the latter case, the employer must do more than show a link between mandatory retirement and the pension plan – it must be able to demonstrate that mandatory retirement is necessary in order to make the pension plan work.

Note – Some key issues for employers in the post-mandatory retirement world include the provision of employee benefits after age 65 and the need to change benefits plans. For some comments on the legal issues, see our blog.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Ian Breneman
Level Chan
Similar Articles
Relevancy Powered by MondaqAI
Boughton Law Corporation
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Boughton Law Corporation
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
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).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions