Does a Mandatory Retirement Age Exist in Canada?

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Once upon a time, everything worked in a certain way. You would finish high school, get a job at a company, work for the next four decades or so, and then, on your sixty-fifth birthday, in line with company policy, be presented with a gold watch and shown the door. Your remaining years would be spent living off the pension you and your company had contributed to throughout your tenure.

Today, everything is different. For most people, remaining in one company for life or receiving a pension are concepts of the past. So, too, is the concept of a company policy-driven mandatory retirement age. However, unlike the end of concepts like having a job for life or a pension, policy-driven mandatory retirement did not fall by the wayside due to business expediency, and instead was removed by government decree.

How this change was manifested was different in each jurisdiction. The method chosen to do so for many jurisdictions appears to have been a revision of the governing human rights statute to update the definition of the word “age”.

Definition of the Word “Age”

For example, up until 2006 in Ontario, the term “age” in the Human Rights Code (the “Code”) was defined as referring to individuals between the ages of 18 – 65. In 2005, the Government of Ontario passed Bill 211, the Ending Mandatory Retirement Statute Law Amendment Act, 2005. In addition to changing several other acts, Bill 211 revised the definition of the term “age” in the Code to refer only to individuals 18 years and older. Bill 211 became effective in December 2006, and the Code was changed. Similar legislation followed across the country at or about the same time. Bona fide Occupational Requirement Related to Age

As a result of the change, it became a breach of the Code to discriminate against someone based on their age. On its face, this put an end to any policy which mandated an individual retire at a certain age. Most human resources legislation includes a carve out for certain positions, where mandatory retirement is permitted due to the nature of the role, where a bona fide occupational requirement (“BFOR”) related to age can be shown.

Positions such as firefighters and pilots have a mandatory retirement age as a BFOR, as the nature of the role and the duties involved mean that doing these past a certain age creates risk of harm to the employee and the public. As such, an individual in this role is compelled to cease the job by a certain age – and the employer doing so is not in breach of the employee’s human rights.

For most positions, as it stands, by law, in Canada, it is a breach of an employee’s human rights to compel them to retire at a certain age.

Certain residual concepts remain in the law. For example, in Ontario, section 25 (2.1) of the Code permits a benefit plan to differentiate between workers based on their age without being in breach of the Code. As a result, a benefit plan may cut off an individual’s participation at age 65 without breaching the Code. In 2019 the Human Rights Tribunal of Ontario (“HRTO”) confirmed that this provision breached section 15(1) of the Canadian Charter of Rights and Freedoms, which sets out equality rights for all individuals. Despite this finding, this provision remains in the Code and does not appear to have made any significant change to the law: this decision has only been cited in a handful of cases.

Mandatory Retirement Lives On – Just by a Different Name

From our perspective as employment lawyers, we can confirm that mandatory retirement lives on – just by a different name. Whether it is a result of a reorganization or simply an attempt to streamline things, we frequently see individuals of an advanced age being dismissed on a without cause basis.

An employer’s unstated motivations in these circumstances can be multiple. A simple bias against an aging employee can be a factor – even if unstated at the time of the dismissal. There can be signs leading up to a dismissal which suggest that the employer’s motivation in the dismissal had an unstated motivation – repeatedly asking about the employee’s retirement plans, for example. When this occurs an employer risks both a  claim of wrongful dismissal and damages for bad faith and breach of the employee’s Code rights.

The employer may also be seeking to reduce labour costs. An employee who has been with an organization for an extended period is not only likely to be of advanced years, but also receiving higher compensation than a newer, younger employee. An employer may see this as an unnecessary expense and dismiss an employee based on their years of service. In this circumstance an employer’s exposure may not be as obvious – but a case for age-related discrimination might still be made out.

The unfortunate side effect of the removal of mandatory retirement is that a working relationship which previously might have concluded with a send-off party might now end in protracted litigation and ill feelings on both sides.

If you are an employer who needs assistance with determining the process for dismissing an employee, irrespective of their age, we would be pleased to guide you through the process to ensure that you comply with the law and minimize potential liability.

If you are an employee who has been dismissed and needs guidance to understand your rights and obligations, including an assessment of whether this dismissal breached your human rights, we would be happy to assist you as well, in order to ensure that you get what you are entitled to.

We are Employment Lawyers who see things from both sides, as we represent both employers and employees.  

And as we often say, if you think you need an Employment Lawyer, you probably do. Feel free to contact us.

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