Age Discrimination In Benefit Plans - Talos v Grand Erie District School Board

Co-author: Samia Hussein, Student-at-Law

A recent decision of the Human Rights Tribunal of Ontario (the "Tribunal") challenges the ability of employers to treat employees over age 65 differently with respect to the provision of benefits. The Employment Standards Act, 2000¹ ("ESA") currently permits differentiation in employee benefit plans with respect to persons age 65 years and older. In Talos v Grand Erie District School Board,² the applicant alleged that such age discrimination is contrary to the Ontario Human Rights Code³ (the "Code").

George Talos ("Mr. Talos"), a teacher for the Grand Erie District School Board (the "School Board"), filed a claim with the Tribunal alleging that his employer's benefits plan is discriminatory. Under the School Board's plan, once an employee reaches age 65 they are no longer entitled to benefits. Mr. Talos alleged that such differential treatment based on age is contrary to the Code.

In this interim decision, the Tribunal considered whether Mr. Talos' claim should be dismissed on the basis that it failed to disclose a reasonable prospect of success, as a result of s.25(2.1) of the Code. Under s. 25(2.1), "The right...to equal treatment with respect to employment without discrimination because of age is not infringed by an employee benefit, pension, superannuation or group insurance plan or fund that complies with the ESA and the regulations thereunder." Under s. 44(1) of the ESA, employers are prohibited from providing benefit plans that treat employees differently based on age. However, in section 1(1) of the Regulation on Benefit Plans,⁴ "age" is defined as persons older than 18 and younger than 65 for the purposes of Part XIII (Benefit Plans) of the ESA.

The combined effect of the Code, the ESA and the regulations thereto, is that employers are permitted to provide benefit plans that differentiate between employees on the basis of age, with respect to employees who are under age 18 or over age 65. Accordingly, plans like the School Board's, which exclude persons over 65, comply with the ESA and do not violate the Code.

Mr. Talos took the position that s. 25(2.1) of the Code does not bar his discrimination claim, because:

1. s.44 of the ESA should be interpreted as only allowing differentiation for bona fide and legitimate reasons; and
   
   
2. Where a benefit plan is provided pursuant to a collective agreement (as in this case), the plan can only differentiate on the basis of age if the collective agreement clearly and unambiguously provides for such differentiation.

The Tribunal rejected both arguments, and found that a plain reading of the legislation makes it clear that the Code does not prohibit discrimination in benefit plans with respect to employees who are over the age of 65.

However, Mr. Talos was permitted to proceed with a challenge to the constitutionality of s.25(2.1) of the Code. More specifically, he has alleged that this section of the Code contravenes his right to equal treatment under the law without discrimination on the basis of age, pursuant to s. 15 of the Canadian Charter of Rights and Freedoms (the "Charter"). In order to be successful in his Charter challenge, Mr. Talos must meet the following three part test set out by the Supreme Court of Canada in Law v Canada:⁵

1. The law imposes differential treatment between the claimant and others, in purpose or effect;
   
   
2. The differential treatment is on an enumerated or analogous ground of discrimination; and
   
   
3. The law in question has a purpose or effect that is discriminatory.

Even if this test is satisfied, s.25(2.1) will not be declared unconstitutional if it is found to be a reasonable limit on Charter rights, which can be justified in a free and democratic society, pursuant to the test developed in R. v. Oakes.⁶

Mr. Talos' Charter challenge has not yet proceeded to a hearing. Employers should watch for the outcome of this case (assuming it is not settled at mediation prior to the hearing), as it may have significant implications on employee benefit plans for all Ontario employers.

¹ Employment Standards Act, 2000, SO 2000, Chapter 41.

² 2013 HRTO 1949.

³ Human Rights Code, RSO 1990, Chapter H 19.

⁴ ON Reg 286/01.

⁵ [1999] 1 SCR 497 at para 88.

⁶ 1986] 1 SCR 103.

The foregoing provides only an overview and does not constitute legal advice. Readers are cautioned against making any decisions based on this material alone. Rather, specific legal advice should be obtained.

© McMillan LLP 2014