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Employment & Labour

Human rights decision a potential game-changer for older workers, employers

A Human Rights Tribunal of Ontario decision on age discrimination could significantly boost employers’ labour costs if it is eventually decided by the Supreme Court of Canada, Toronto employment lawyer Jordan Rodney tells AdvocateDaily.com.

The adjudicator in the case found a section of the province’s Human Rights Code allowing employers to cut workers’ benefits when they hit 65 was unconstitutional.

The decision has been hailed by some as a game-changer for older employees, but Rodney, the founder of Rodney Employment Law, explains that the immediate impact is actually quite limited, since the tribunal’s jurisdiction means it can only make declarations of invalidity on a case-by-case basis.

“This case was isolated based on its individual facts,” he says.

But that could change if the issue reaches the Supreme Court of Canada and the nation’s top court adopts the same reasoning, due to its ability to strike down laws and declare a more general declaration of invalidity, Rodney warns.

“The potential impact is huge. The older a worker is the greater likelihood they will be injured/sick and need to use their group benefits,” he says. “That’s going to result in staggeringly high labour costs if employers need to continue benefits well beyond age 65.

“This case highlights an issue for employers who are already walking a tightrope with older employees,” Jordan adds.

According to the ruling, the case was brought by a Brantford, Ont. teacher unhappy with his school board’s decision to exclude him from its benefits plan when he turned 65, which forced him to pay out of pocket for drugs needed to treat his wife’s cancer.

Since 2006, Ontario employers have been barred from terminating employees when they turned 65. However, the school board relied on sections of the Human Rights Code and Employment Standards Act which preserved the right of employers to cut workers off from benefits.

But in her decision, HRTO Associate Chair Yola Grant ruled these sections breached s. 15(1) of the Charter, which protects against discrimination on the basis of age, among other things.

The school board submitted extensive actuarial evidence about the cost of providing group benefits to those over the age of 65 and claimed that invalidating the sections would interfere with the collective bargaining process.

However, Grant ruled that it would not be cost-prohibitive to provide health coverage and life insurance benefits to employees over 65.

“The impugned provisions could have been better tailored to preserve the viability of workplace benefit plans without the 'carve out' that left older workers vulnerable to a lessening of their compensation based solely on their age, and not their ability, performance or any other bona fide qualification,” Grant wrote, concluding that the infringement could not be justified under s. 1 of the Charter.

Although the HRTO cannot strike down legislation, Ontario Human Rights Commission Chief Commissioner Renu Mandhane told the Toronto Star the decision should spur the government to change the law.

“This is a significant case because it establishes that all workers deserve fair benefits and it also acknowledges that loss of benefits have a disproportionate impact on poor and older workers,” she told the paper.

While they wait for further legislative or judicial developments, Rodney says there are practical steps employers can take in the meantime.

“This is a great opportunity to achieve a win-win result for the company and employees by having a conversation, being proactive, and engaging with staff early on, rather than waiting until someone is 68 and putting them on a performance improvement plan,” he says.

Rodney says employers who take a proactive approach should start by contacting their insurance company and completing an assessment of their workplace to determine the potential costs if benefits were continued beyond age 65.

“See where you are in terms of age, and what you can be doing to avoid this kind of decision in your own case,” he says. “It’s also prudent for employers to look at employment status simultaneously with benefits. They’re not mutually exclusive, and if you look at them in a holistic manner, you can minimize your risk.”

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