Outlawing Mandatory Retirement

The Ontario Government has passed a law which will end mandatory retirement for employees who have turned 65 years of age. The law will affect every employer. APPLICATION The law, titled “Ending Mandatory Retirement Statute Law Amendment Act, 2005” was pronounced on December 12, 2005 and will come into force December 12, 2006. The legislation is not retro-active, so an employee cannot demand her job back if she was required to retire under a mandatory retirement policy before December 12, 2006.

Until the legislation comes into effect, the current rules regarding mandatory retirement apply. Therefore, if an employee turns 65 before December 12, 2006 and the company he or she works for has a mandatory retirement policy that forms part of the employment agreement, the employee may be forced to retire.PROHIBITION ON FORCING RETIREMENTThe new Act changes the Ontario Human Rights Code and makes it a Human Rights offence to discriminate on the basis of age, thereby prohibiting an employer from forcing an employee to retire simply because he or she is 65 years or older.AGE REQUIREMENTSAge may be a factor in the decision to terminate only where age can be shown to be a bona fide occupational requirement. In order to show a bona fide occupational requirement, an employer must show that the requirement is rationally connected to the performance of the job, the policy has been adopted in good faith and the requirement is reasonably necessary to accomplish a legitimate work purpose. We suggest to employers that if there is a bona fide occupational requirement, it be identified clearly in an employee handbook or written policy.If the termination of an employee is found to be because of age and age is not a bona fide occupational requirement, a terminated employee will have recourse to the Courts for wrongful dismissal and to the Ontario Human Rights Commission under the Ontario Human Rights Code.BENEFIT PLANSThe status quo will be maintained with respect to disability plans, life insurance plans, and health benefit plans. The provision of benefits to workers aged 65 and older will continue to be at the employer’s discretion. However, if an employer does not continue a benefit to a worker who has turned 65, it could be argued that the discontinuance of benefit constitutes constructive dismissal. If the benefits plan changes at 65, at a minimum, the details should be noted in the employee’s contract or employee handbook.COLLECTIVE AGREEMENTSCollective agreements will not be exempt from prohibition of mandatory retirement. As a result collective agreements cannot contain mandatory retirement provisions and employees in unionized environments cannot be forced to retire merely because of age.GOVERNMENT SUPPLEMENTSThere are no changes planned to the Ontario Drug Benefit Program (ODBP) and Guaranteed Annual Income System (GAINS). Therefore an employee who continues to work past 65 may still apply for these benefits.WORKPLACE SAFETY AND INSURANCE PROGRAMThe Act will not affect the Workplace Safety and Insurance Act, 1997. The age based provisions in the Workplace Safety and Insurance Program are exempt from the prohibition against age discrimination in employment and the provision of services.