First thing’s first: there is no such thing as mandatory retirement in Ontario. Although age 65 is the often cited “retirement age,” there is, in fact, no specific age in Canada where employees are expected (or can be forced) to retire. Why? Because human rights law does not allow mandatory retirement age, as it constitutes age discrimination.
If an employer forces (or pressures) an employee to retire based simply on the fact they are older in age, such conduct would constitutes age-based discrimination. In other words, an employer cannot treat any specific employee(s) in a negatively different manner compared to their colleagues on the basis of their age. For instance, it means that employers cannot make decisions about hiring, promotion, training opportunities, or termination on the basis of an employee’s age.
Where an employer makes a decision influenced by the employee’s older age, and not on the purely objective basis of a person’s ability to perform the essential duties of the job, the employee may be able to sue the employer for age-based discrimination under the Ontario Human Rights Code (or the Canadian Human Rights Act for federal employees).
As a result, most employees are allowed to work until they willingly decide to retire, or are incapable of performing their jobs (with a few policy-based exceptions). There is a basic reason why human rights law prohibits age discrimination: employment is fundamental to a person’s sense of dignity, respect, financial well-being, place in their community, as it ensures equal participation and equal opportunity to contribute to society.
What Does Human Rights Law Say About Age-Based Discrimination?
In Ontario, the Ontario Human Rights Code is a provincial law that guarantees everybody the right to be treated equally and have the same opportunities without discrimination, including in the areas such as housing, accommodation, contracts services and employment. It specifically prohibits employers from engaging in actions that discriminate against people based on a protected grounds (personal characteristics), including:
- Age (18 years or older)
- Disability
- Family status
- Ancestry, colour, race
- Ethnic origin
- Place of origin
- Creed
- Marital status (including single status)
- Receipt of public assistance (in housing only)
- Record of offences (in employment only)
- Sex (including pregnancy and breastfeeding)
- Sexual orientation
For instance, if an employee older than age 65 believes that they have been discriminated against on the basis of their older age, including through mandatory retirement policies, may file a complaint of discrimination on the basis of age with the Ontario Human Rights Commission.
In that case, if the employee is successful in a discrimination claim, she may have a claim against the employer under the Human Rights Code, the employee may be awarded:
- Financial Compensation – “damages” for injury to their dignity, feelings and self-respect as a result of the discriminatory termination of employment
- Lost Income/Wages (i.e., similar to a severance package if you were terminated based on a discriminatory reason)
- Lost Benefits (i.e., long term disability, health/drug benefits, etc.)
- Lost Bonuses or Commissions that you would have made if you had not been discriminated against
- Difference in income between old job (where employee was discriminated against) and the new job (job found after discrimination)
- Loss of Statutory Employment-Related Benefits (e.g., maternity or parental benefits under the Employment Insurance Act)
- Out-of-Pocket Expenses (such as job search costs, career transition services or relocation expenses)
- Non-financial Remedies – (such as reinstatement to the job from which they were wrongfully dismissed)
- Public Interest Remedies – (such as change in employer’s workplace policies, rule or practice)
Examples of Age Discrimination in Employment
In employment law, the impact of an employee’s age in being treated unfairly can manifest itself in various forms (often subtle). For instance, an employer may be found to have discriminated against the employee on the basis of their older age in some of the following circumstances:
- termination of employment – an employer decides to fire an employee from their job (in which case, they may sue for wrongful dismissal to obtain a financial severance package from the employer)
- temporary layoff – an employer decides to put a particular employee on an unpaid layoff from their job for a temporary period of time
- failure to accommodate – an employer refuses to provide necessary assistance and support to an employee’s needs based on their age
- hiring – an employer decides not to proceed with hiring the employee due to their older age
Exceptions – Where Age Based Discrimination May be Justified
Under section 24 of the Human Rights Code, there are specific exceptions on the right of an employee to be treated equally in the course of their employment, including:
(b) the discrimination in employment is for reasons of age, sex, record of offences or marital status if the age, sex, record of offences or marital status of the applicant is a reasonable and bona fide qualification because of the nature of the employment;
(c) an individual person refuses to employ another for reasons of any prohibited ground of discrimination in section 5, where the primary duty of the employment is attending to the medical or personal needs of the person or of an ill child or an aged, infirm or ill spouse or other relative of the person;
Therefore, this means that except in circumstances where mandatory retirement can be shown to be a bona fide occupational requirement (e.g., judges), employers generally cannot force (or pressure) an employee to retire based on their older age.
For instance, employers may be able to justify mandatory retirement policies on the basis that an employee being younger than age 65 is a bona fide (legitimate) occupational requirement. However, in order to meet this test, employers must show that their mandatory retirement policy was:
(1) Subjective component: the employer must establish that mandatory retirement was imposed honestly, in good faith, and in the belief that the limitation is in the interests of the adequate performance of the work, and not for ulterior or extraneous reasons aimed at objectives which could defeat the purpose of the Code.
(2) Objective component: the employer must establish that the retirement plan is reasonably necessary to assure the efficient and economical performance of the job without endangering the employee, his fellow employees and the general public.
For example, in a case called Large v. Stratford (City), the Supreme Court was asked to decide on the legality of a mandatory retirement policy that required police officers to retire at age 60. In this case, the Court upheld the policy because the employer was able to provide evidence showing that, after age 60, individuals develop higher risk of cardiovascular disease and a decline of aerobic capacity (ability to engage in physical fitness).
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If you are an employee who believes you have been discriminated against by your employer and would like to pursue a wrongful dismissal claim and severance package, or if you an employer going through a termination of employment involving a severance package, it is important to speak with our employment lawyer to determine your legal rights and options.
It is important for both employers and employees to negotiate the terms of a termination of employment and severance package with the assistance of an employment lawyer, and to comply with negotiated terms of settlement. If you would like legal advice on your own situation as an employee (or an employer), please contact 647-822-5492, or book a consultation today.