February 4, 2004

Is it Illegal to Have Mandatory Retirement Policy?

Question: Is it illegal to have a mandatory age of retirement policy in an organization? I would like your opinion on the constitutionality of the following article in a collective agreement between a municipality and a union: “All employees reaching normal retirement age of 65 shall be obliged to retire from the services of the employer.”

In order to answer your question it is necessary to determine whether this article violates the Ontario Human Rights Code and or the Charter of Rights and Freedoms.

Ontario Human Rights Code

Currently the code does not extend protection from age-discrimination in employment to those 65 or older. The code prohibits discrimination on the basis of age.

Age is defined as being between the ages of 18 and 65 years inclusive. But a report made by the Ontario Human Rights Commission suggested that mandatory retirement is discriminatory and recommended the law be reviewed.

This report led to the development of Bill 68, an act to amend the provisions of certain acts respecting the age of retirement. Under Bill 68, the definition of age under the code would be amended to being 18 years of age or older with no upper limit. While this bill was to become law in January 2005, it died when there was a change in the provincial government. It remains to be seen whether the new Liberal government will pursue a similar initiative. Therefore at present a provision requiring retirement at age 65 would not violate the code.

Charter of Rights and Freedoms

One must also consider the application of the charter to this situation since the article was entered into by a municipality exercising statutory powers of a public nature.

The Supreme Court of Canada has ruled, in a series of decisions, that while mandatory retirement policies do constitute age discrimination under section 15(1) (the right to equality), these policies can be justified under section one of the charter. The basis for the Supreme Court’s decision is that it is a bona fide occupational requirement.

In these particular cases the rationales mentioned included infusing new talent into the organizations, facilitating personnel administration and buttressing the deferred wages and compensation structure.

Although the Supreme Court has held mandatory retirement policies do not violate the charter, the British Columbia Court of Appeal confirmed in Greater Vancouver Regional District Employees’ Union v. Greater Vancouver, that once a mandatory retirement policy has been found to infringe equality rights, there is an onus on the government employer to justify its policy under section one of the charter.

In accordance with the above, a mandatory age requirement in a collective agreement with a government employer would violate equality rights under the charter, as it discriminates on the basis of age.

Nonetheless the article may be upheld if the municipal government can demonstrate the infringement is a reasonable limit that is demonstrably justified in a free and democratic society. It should not be assumed that all mandatory retirement policies which do not violate provincial human rights legislation will be justified under section one of the charter.

Peter Israel is the senior partner in the Toronto law firm of Israel Foulon LLP – Employment and Labour Lawyers. He can be reached at 416-640-1550 or pi@israelfoulon.com. A version of this article originally appeared in the Carswell publication, Canadian Employment Law Today

LEGAL DISCLAIMER: This article is for informational purposes only and is not intended to provide legal advice, which in all circumstances must be tailored to the specific facts of any problem. You should obtain a proper legal consultation in order to determine how this article applies to your specific situation.
Please feel free to contact Israel Foulon LLP to learn more at 416-640-1550.

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