Canada: Legislation Introduced To Eliminate Mandatory Retirement In British Columbia

Originally published in the May 2007 Farris, Labour and Employment Update Newsletter of Farris, Vaughan, Wills & Murphy LLP.

The British Columbia Human Rights Code (the "Code") currently prohibits age discrimination against those aged 19 – 64. Therefore, it has not been discriminatory under that legislation to deny employment because a person is 65 or older. However, a planned change to the definition of "age" in the Code will change that.

On April 25, 2007 Attorney General Wally Oppal introduced Bill 31 Human Rights Code (Mandatory Retirement Elimination) Amendment Act, 2007. Bill 31 seeks to extend the protections of the Code beyond age 64. This change will render discriminatory any policy requiring retirement at a particular age (in any industry governed by the provincial Code). It will also be discriminatory to deny employment to any person 19 or older on the basis of age. The effective date for this proposed change to the law is January 1, 2008.

This change will bring British Columbia in line with the majority of other provinces in Canada, including Ontario. Further, government employers in British Columbia are already obliged to demonstrate that their mandatory retirement policies meet the test under the equality section of the Charter of Rights and Freedoms. With that said there will be some major adjustments for British Columbia employers arising from this change. Many employment contracts, workplace policies, and collective agreements were negotiated with the expectation that employees would be required to retire at age 65. These documents and plans will need to be changed to reflect the new reality.

Specific Exceptions in the Legislation

The defence of a bona fide occupational requirement ("BFOR") will continue to be available to employers. However, under the prevailing legal test the standard to be met is very high. An employer must demonstrate that a particular age is reasonably necessary based on the physical and cognitive requirements of the position. The employer must also demonstrate that there is no way to accommodate the individual in the position without causing undue hardship to the employer’s operation. Given this standard, in practice the BFOR defence will likely continue to apply to a limited range of occupations.

Bill 31 allows for distinctions based on age in relation to "the determination of premiums or benefits under contracts of life or health insurance". Therefore, "contracts of insurance may continue to differentiate on the basis of age without contravening the Code" (as stated in the explanatory notes to Bill 31).

Bill 31 also allows age-based distinctions in relation to the "operation of a bona fide retirement, superannuation or pension plan or … a bona fide group or employee insurance plan, whether or not that plan is the subject of a contract of insurance between an insurer and an employer". Therefore, according to the explanatory notes, "bona fide group or employee insurance plans, whether provided by a third party insurer or through self-insurance, do not contravene the Code". In future issues of this newsletter we will discuss this language further, and in particular the term "bona fide" plan.

Finally, Bill 31 provides that "nothing in this Code prohibits a distinction on the basis of age if that distinction is permitted or required by any Act or regulation". This is added to section 41 of the Code ("exemptions"). At the same time, the proposed law also amends the Public Service Act, rescinding the requirement for employees governed by that Act to retire at age 65.

Presuming the bill is passed into law in its current form the change will become effective January 1, 2008. There are a number of steps that employers can take in advance:

• Review workplace policies, contracts and manuals in respect of references to retirement. Unless a BFOR defence can be established, any mandatory retirement language will need to be changed under the new legislation. Retirement policies that permit retirement at a particular age (but do not require it) need not be changed.
• Communicate the pending change to managers and other front line personnel (through appropriate bulletins, training, etc.). As with other forms of discrimination, an employer may be held liable for any unlawful acts of its employees. Therefore, it is important to guard against conduct that might expose the employer to a discrimination complaint.
• Consider and evaluate how your organization tends to handle performance problems with employees who are nearing retirement. Because employers have been able to insist on mandatory retirement, there may have been a tendency to avoid performance management and simply wait until such an employee turns 65. Under the new legislation this will no longer be a viable strategy as there is no certain age for retirement. Rather, employers should ensure that all employees are subject to performance standards and expectations.

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.