Ontario to Eliminate Mandatory Retirement
By Cathy Baker, Selectpath

Over the past 18 months, we have followed the Ontario government’s plans to eliminate mandatory retirement. To recap, Bill 211 will amend the definition of “age” in subsection 10(1) of the Ontario Human Rights Code in order to protect persons aged 65 and older against age discrimination in employment. Mandatory retirement will only be permitted if there is a “bona fide” occupational requirement as determined under the Human Rights Code. The key milestones thus far have been:

• In the summer of 2004, the government announces its intention to eliminate mandatory retirement
• In August 2004, the government confirmed its intention with the release of its consultation paper, Providing Choice: A Consultation Paper On Ending Mandatory Retirement, which solicited the public’s input on how to end mandatory retirement in a fair and balanced way
• June 7, 2005, the government tabled legislation to eliminate mandatory retirement in the province
• On December 8, 2005, Ontario’s Bill 211, which will eliminate mandatory retirement in the province, passed third reading. It received royal assent December 12, 2005 and will come into force on December 12, 2006.

Though many concerns about the elimination of mandatory retirement were addressed in the draft legislation, there was some suggestion in the legislation that insured plans would be exempt from providing benefits past the age of 65. What wasn’t clear was whether the same exemption would apply to ASO plans.

The Canadian Life and Health Insurance Association (CLHIA), has presented ASO plan sponsor concerns to the Ministry of Labour to ensure they fully understood the implications of the legislation on group benefit plans.

Recent Developments

Following a CLHIA submission to the standing committee on justice policy – which reviewed the legislation prior to its third reading – and subsequent discussions with the Ministry of Labour, Bill 211 has been amended to make clear that the status quo continues with respect to both insured and ASO plans:

• the new 25(2.1) of the Code deals only with 'age', and no longer contains a reference to contracts "between an insurer and an employer";
• the new 25(2.2) of the Code specifically states that "Subsection (2.1) applies whether or not a plan or fund is the subject of a contract of insurance between an insurer and an employer”.

The changes clarify that while employers can’t discriminate based on age (i.e. terminate employment at age 65), plan sponsors are not required to continue benefits past 65.

Unionized Employees

• Mandatory retirement will only be permitted under the Human Rights Code as a bona fide occupational requirement
• Existing mandatory retirement provisions in current collective agreements will no longer be enforceable once the proposed legislation comes into effect, one year after Royal Assent
• Nothing in this Bill prevents unions and employers from negotiating early retirement packages for workers

Pension Benefits

• Ending mandatory retirement will not have an impact on pension benefits already earned
• Employees could continue membership in pension plans and accrue benefits past age 65 subject to service or contribution caps of the pension plan
• Ending mandatory retirement will not affect the entitlement of individuals in Ontario to access CPP at age 65

Employment Benefits

• The provision under the Employment Standards Act, 2000 prohibiting employers from discriminating on the basis of age in providing benefits to employees aged 18 to 65 will remain in place following the implementation of this legislation. In other words, it will be permissible to exclude employees aged 65 and older from benefit plan coverages.
• Government benefits such as the Ontario Drug Benefit Plan will continue to be available for those aged 65 and over

Notice of Termination After Age 65

• Neither notice of termination nor termination pay is currently available for individuals whose employment is terminated at age 65 as a result of a mandatory retirement policy. The proposed legislation will entitle all eligible employees, regardless of age, to receive notice of termination or pay in lieu of notice when their employer terminates their employment without cause. However, notice of termination or pay in lieu will not be required for employees who continue to be subject to a mandatory retirement policy or practice that is permitted as a bona fide occupational requirement under the Human Rights Code.

Workplace Safety and Insurance

• Bill 211 will not alter any entitlements under the Workplace Safety and Insurance Act, 1997.
• Workers who are aged 63 or more at the time of an injury will continue to be able to receive loss of earning benefits for up to two years
• Workers who are injured before age 63 will cease to receive loss of earning benefits at age 65

Other Changes

• Specific provisions in other legislation which currently allow mandatory retirement will be eliminated.
• With mandatory retirement no longer an option in provincially regulated workplaces in Ontario (except as a “bona fide occupational requirement”), employers will have to carefully examine a number of issues prior to the implementation of this legislation. At a minimum, employers will have to revise employment policies which call for mandatory retirement. More importantly, they will have to consider the impact of accommodating aging employees who continue to work.
  

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