The sun never sets on a career

Employers can no longer depend on retirement to refresh the workforce

By Jeffrey R. Smith (jeffrey.r.smith@thomsonreuters.com)

Once upon a time, it was standard for people to retire by the time they hit age 65. In robust economic times, people were able to build nest eggs so they could retire as early as their 50s. However, with the aging baby boomer population, tighter wallets and increased human rights awareness, the tide towards older workers is shifting to the point where it’s not legal for an employer to give an employer the golden handshake at 65 if the employee doesn’t want to go.

Two Air Canada pilots who were forced to retire when they turned 65 because of international regulations and the fact it was a “normal” retirement age in the profession. However, they were later ordered reinstated. (Photo: Andy Clark/Reuters)

Pretty much every jurisdiction in Canada has outlawed mandatory retirement for employees who reach age 65. For example, the Ontario Human Rights Code used to prohibit discrimination based on age only for those aged 18 to 65. However, in 2006, it was changed so protection against age discrimination was extended to everyone over 18. This effectively prevented employers from pushing 65-year-old employees out the door.

The new protections for workers over 65 has brought established mandatory retirement agreements and benefits agreements under fire as aging employees challenge age-based restrictions in employment contracts. In spring 2010, a Quebec tribunal ruled that province’s workers’ compensation legislation violated human rights legislation because it allowed for reduced benefits when workers turned 65, despite the fact the average retirement age in Quebec was 59 and the province argued a reduction of income would normally be expected. There have been other cases where employee benefits plans that reduced benefits for employees when they reached 65 years of age have been challenged.

Another recent prominent case was that of two Air Canada pilots who were forced to retire when they turned 65 because of international regulations and the fact it was a “normal” retirement age in the profession. However, they were later ordered reinstated because the availability of domestic routes prevented mandatory retirement at 65 from being necessary to the job. The case has gone to the Supreme Court of Canada.

Also recently, a partner at a B.C. law firm cried discrimination over a partnership agreement that stipulated partners must retire at age 65 was discriminatory. The case has yet to be decided, but the province’s human rights tribunal has found the firm has enough control over partners to consider them employees.

These cases show how more employees want to keep working past the age of 65 and this number will likely increase as more baby boomers reach senior citizen status. We’re at a point now where the working career is kind of like the British Empire once was: The sun never sets on it.

The elimination of mandatory retirement expands human rights protection for employees, but what kind of effect might this have on businesses? When more senior workers stay on into old age, it’s unlikely they can maintain their productivity levels and may need more sick days. And what does this mean for younger workers looking for jobs or promotions. What can employers do to address these issues?

Jeffrey R. Smith is the editor of Canadian Employment Law Today, a publication that looks at workplace law from a business perspective. For more information, visit http://www.employmentlawtoday.com.

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