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On June 7, 2005, the McGuinty government introduced legislation to eliminate mandatory retirement in Ontario. Set out below are the key changes that will result from the passage of Bill 211:[1]
- The legislation will amend the Ontario Human Rights Code to ensure that people will not face mandatory retirement at age 65. The single exception to the rule is the "bona fide occupational requirement" that may justify mandatory retirement in limited circumstances.
- A one-year transition period is proposed to allow employers time to prepare for the change. The legislation will become effective one year after receiving Royal Assent. The date of Royal Assent, however, is not yet known.
- Once the proposed legislation comes into effect, all provisions requiring mandatory retirement will become unenforceable, including those in existing collective agreements. Unlike the bill to end mandatory retirement introduced but never passed by the previous Progressive Conservative government, Bill 211 does not provide for a phasing-in of the ban to coincide with the expiration dates of collective agreements.
- The legislation will not affect pension benefits already earned, but employees will be permitted to accrue benefits past age 65 subject to service or contribution caps.
- Individuals aged 65 or more will continue to be eligible for government benefits such as the Ontario Drug Benefit Plan.
- Entitlements under the Workplace Safety and Insurance Act, 1997 will not change. Workers injured at an age less than 63 will still cease to receive loss of earning benefits at age 65 and injured workers aged 63 or more at the time of injury will continue to be able to receive loss of earning benefits for up to two years.
The Duty to Accommodate
The intersection of the end of mandatory retirement with the duty to accommodate may cause difficulties for employers who employ older workers. With the end of mandatory retirement, employers will increasingly be under a duty to accommodate age-related illnesses and disabilities. Moreover, in light of this legislation, employers wishing to terminate employees who are over 65 will have to provide them with notice of termination or pay in lieu of notice and with "common law" notice if there is no collective agreement or employment contract in place.
Bill 211 will continue to allow mandatory retirement in limited circumstances where it can be justified as a "bona fide occupational requirement" under the Human Rights Code. An employee may be required to stop working at a specified age such as 65 or younger, if the employer is able to demonstrate that:
- an age-based job requirement or qualification is an essential part of the performance of critical job duties and tasks;
- the employee does not meet the job requirement or qualification; and
- the employee could not be accommodated without causing undue hardship to the employer.
Pension and Benefits
The effect of Bill 211 on long-term disability and pension benefits is not clearly addressed in the legislation. Currently, under many benefit plans, LTD and other benefits are discontinued after age 65. In Quebec and Manitoba, where legislation banning mandatory retirement has already been enacted, it nonetheless remains permissible to discontinue benefits at 65. For example, under section 20.1 of the Quebec Charter of Human Rights and Freedoms differentiations in a benefits or pension plan are "deemed non-discriminatory where the use thereof is warranted and the basis therefor is a risk determination factor based on actuarial data."
Some would argue, however, that with the changes to the Ontario Human Rights Code brought in under Bill 211, any age-based threshold for LTD or other benefits would constitute age-based discrimination. Similarly, although the Bill appears to permit service or contribution caps on the accrual of pension benefits, this too could be determined to be discriminatory. The government's failure to address these complex issues will likely have to be resolved through litigation.
Legislative Changes
Ending mandatory retirement will require changes to a number of Ontario statutes including the following key amendments most relevant to Ontario employers:
| Statute | Key Amendment |
| Ontario Human Rights Code | The definition of "age" in subsection 10(1) of the Code will be amended to remove the age 65 cap on discrimination in employment. |
| Employment Standards Act, 2000 | All eligible employees, regardless of age, will be entitled to receive notice of termination or pay in lieu of notice when their employment is ended by the employer. This will not include employees who continue to be subject to a mandatory retirement policy or practice that is permitted under the Human Rights Code. |
| Public Service Act | The requirement that Ontario government civil servants retire at age 65 will be repealed. |
| Workplace Safety and Insurance Act, 1997 | The Workplace Safety and Insurance Act, 1997 and its predecessor, the Workers Compensation Act, and all regulations, policies, and decisions made under them will be exempted to allow maintenance of the status quo. |
The purpose of this document is to provide information as to developments in the law. It does not contain a full analysis of the law nor does it constitute an opinion of Ogilvy Renault or any member of the firm on the points of law discussed.
[1]. Bill 211 2005, An Act to amend the Human Rights Code and other Acts to end mandatory retirement.
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