August 7, 2018by Israel Foulon LLP
In Talos v Grand Erie District School Board, 2018 HRTO 680, the Human Rights Tribunal of Ontario found that s. 25(2.1) of the Human Rights Code (“Code”), which essentially allows employers to cut benefits once employees reach age 65, is unconstitutional.
Specifically, the Tribunal held that the Code’s “carve out” violates the equality provision found in s. 15 of the Canadian Charter of Rights and Freedoms (“Charter”). The Code creates a distinction based on age, an enumerated Charter ground, that disadvantages those aged 65 years and older. The Tribunal stated that this “serves to devalue the contribution of workers age 65 and older in the workplace and entrenches the stereotype that their labour is worth less:” at para 244. In other words, the distinction has the effect of perpetuating and exacerbating the disadvantage already faced by workers aged 65 and older.
The Tribunal also held that the violation of s. 15 could not be justified as a reasonable limit under s. 1 of the Charter. The employer argued that section 25(2.1) protected the financial viability of workplace benefits, and thus could be saved under s. 1 of the Charter. While the Tribunal agreed that the financial viability of benefits plans was a pressing and substantial objective, it also held that “the policy choice to deprive all active workers age 65 and older of Code protection from the elimination or reduction of workplace benefits” constitutes a “blanket carve-out”, and does not comply with the minimal impairment requirement under s. 1 of the Charter: at para 272.
The Tribunal also stated that there were less intrusive means to maintain the financial viability of benefit plans, such as requiring an actuarial justification for reduced benefits. This would have allowed the Tribunal to examine whether age-based differences in benefits were reasonable in the circumstances. The Tribunal accepted that, in the circumstances, it was not cost-prohibitive to include workers aged 65 and older in the benefits plan.
Importantly, the Tribunal was clear that the decision did not apply to long-term disability insurance, pension plans and superannuation funds, which were not subject to the Applicant’s challenge.
Given that the Tribunal’s decision is an interim decision, it remains to be seen what the final remedy will be. While the government may choose to amend the Code, it is also possible that they will seek a judicial review of the decision at the Superior Court of Justice – Divisional Court. Importantly, the Tribunal does not have the authority to strike down the offending provision.
In the meantime, employers should be prepared for the possibility that current employees will dispute the discontinuance of their benefits at age 65. If employers are approached by employees about this decision, employers should explain to employees that this is not a final decision and that the Code exemption that allows employers to cut benefits once employees reach age 65 remains the law. The provision has not been struck down as unconstitutional as the Human Rights Tribunal does not have such power – only a court can do this. Employers should proactively review benefit plans with their provider to determine the potential impact of the decision with regard to its workplace.
We will keep you updated regarding any new developments.