Canada: Mandatory Retirement Ends December 12, 2006

On December 12, 2006, Ontario joins the ranks of jurisdictions allowing employees to choose their own retirement date, courtesy of the Ending Mandatory Retirement Statute Law Amendment Act, 2005. As we alerted readers previously, the legislation was passed in December, 2005 but employers were given one year before the legislation took effect in order to make necessary amendments to employment policies and practices.

To recap, the legislation amended the definition of "age" in subsection 10(1) of the Ontario Human Rights Code in order to protect persons aged 65 and older against age discrimination in employment. Mandatory retirement will only be permitted if there is a "bona fide occupational requirement" as determined under the Human Rights Code.

Other key elements of the legislation:

• Mandatory retirement will only be permitted under the Human Rights Code as a "bona fide occupational requirement".

• Existing mandatory retirement provisions in current collective agreements will no longer be enforceable.

• Nothing in the Act prevents unions and employers from negotiating early retirement incentives for workers.

• Ending mandatory retirement will not have an impact on pension benefits already earned.

• Employees could continue membership in pension plans and accrue benefits past age 65 subject to service or contribution caps of the pension plan.

• Ending mandatory retirement will not affect the entitlement of individuals in Ontario to access CPP at age 65.

• The provision under the Employment Standards Act, 2000 prohibiting employers from discriminating on the basis of age in providing benefits to employees aged 18 to 64 remains in place. In other words it will be permissible to exclude employees aged 65 and older from benefit plan coverages.

• Government benefits such as the Ontario Drug Benefit Plan continue to be available for those aged 65 and over.

• Employees, regardless of age, are entitled to receive notice of termination or pay in lieu of notice when their employer terminates their employment without cause. However, notice of termination or pay in lieu will not be required for employees who continue to be subject to a mandatory retirement policy or practice that is permitted as a bona fide occupational requirement under the Human Rights Code.

• The Act does not alter any entitlements under the Workplace Safety and Insurance Act, 1997.

• Workers who are aged 63 or more at the time of an injury will continue to be able to receive loss of earning benefits for up to two years.

• Workers who are injured before age 63 will cease to receive loss of earning benefits at age 65.

• Specific provisions in other legislation which allow mandatory retirement have been eliminated.

With mandatory retirement no longer an option in provincially regulated workplaces in Ontario (except as a "bona fide occupational requirement"), employers who still have mandatory retirement policies will find that they are not enforceable. Employers will have to revise employment policies which call for mandatory retirement. More importantly, they will have to consider the impact of accommodating aging employees who continue to work.

Any member of our Employment and Labour Relations Group will be pleased to advise you of your obligations in a post mandatory retirement era.

© Copyright 2007 McMillan Binch Mendelsohn LLP