Federal government eliminates mandatory retirement

February 6, 2012

Mandatory retirement will be outlawed in the federal sector (except where an employer can establish that the rule is a bona fide occupational requirement) as of December 15, 2012.  On December 15, 2011, the Parliament of Canada gave Royal Assent to Bill C-13, Keeping Canada’s Economy and Jobs Growing Act. This legislation repeals section 15(1)(c) of the Canadian Human Rights Act that permits employers to terminate employees because they have reached the normal age of retirement, and section 235(2)(b) of the Canada Labour Code that provides that employees are not entitled to severance pay if they are entitled, immediately upon termination, to a pension contributed to by their employer.  Both amendments come into force on December 15, 2012.

The amendments bring the federal government in line with the majority of Canadian provinces, where mandatory retirement has been abolished in all provincial jurisdictions except New Brunswick.  The new law also follows on the heels of litigation before the Canadian Human Rights Tribunal and the Federal Court concerning Air Canada’s mandatory retirement policy for airline pilots at age 60.  The constitutional validity of section 15(1)(c) of the Canadian Human Rights Act was challenged in that litigation and the subsection was found to be invalid as contrary to the Canadian Charter of Rights and Freedoms.  The most recent decision of the Canadian Human Rights Tribunal in that prolonged Air Canada litigation found that post 2006, the mandatory retirement of pilots at age 60 was based solely on a bona fide occupational requirement and therefore is not a discriminatory practice.

The end of mandatory retirement presents significant challenges for employers.  For years mandatory retirement was one of the key tools in an employer’s toolbox for the purpose of transitioning the workforce. More than ever, employers will need to ensure that they are accommodating the needs of employees with disabilities up to the point of undue hardship despite the fact that many of these employees’ disabilities may be attributed to the common and generally accepted effects of aging on the mind and body.  Where the continued employment of persons beyond the normal age of retirement carries with it serious concerns with respect to health, safety and cost, employers may wish to consider whether a rule that employees retire at a certain age is likely to qualify as a bona fide occupational requirement for any positions within their organization as was the case with the pilots involved in the Air Canada case. Employers will also want to be diligent in ensuring that all employment contracts, collective agreements and policies are reviewed for compliance with the elimination of mandatory retirement in the federal sector prior to December 15, 2012.

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