Employment & Labour, Mediation

Employers should review benefits plans after HRTO ruling: Rudner

By AdvocateDaily.com Staff

Employers across Ontario should review their benefit plans in case they have to change them following a recent Ontario Human Rights Tribunal (HRTO) decision impacting workers age 65 and older, Toronto employment lawyer and mediator Stuart Rudner writes in The Lawyer’s Daily.

“It has been over a decade since Ontario effectively abolished mandatory retirement by amending the Human Rights Code to extend its protection against discrimination to workers over the age of 65," he says.

“The legislation which effected this change had an interesting twist, however: it allowed employers to offer different (i.e. lesser) benefits to those older workers."

Rudner, founder of Rudner Law, says that “loophole” has now been closed as a result of the Ontario Human Rights Tribunal, which ruled in its decision that this distinction for older workers was a breach of the equality provision of the Charter and therefore void.

“It took longer than I would have expected, but it is not surprising that the HRTO ruled as it did,” he says.

The successful challenge involved a teacher who continued to work past 65 years of age, explains Rudner.

“When he turned 65, he lost most of his benefits. [The teacher] testified that he had to pay out-of-pocket for some of the drugs needed to treat his wife’s stage four ovarian cancer,” Rudner says. “As he said, ‘Without those drugs, it was my opinion at the time that her life was being further threatened by the fact that we did not have a group benefit policy.’ Sadly, she passed away after testifying at the hearing.”

Some of the findings of the HRTO:

  • S. 25.1 of the Code, along with the relevant provisions in the Employment Standards Act, 2000, create a distinction between employees who are over and under the age of 65 which is a prima facie violation of the Charter;
  • There was insufficient evidence to conclude there was proper consideration of the impact on workers over the age of 65;
  • There was insufficient empirical evidence to support the argument that the distinction between workers over and under the age of 65 was necessary to maintain the financial viability of benefit plans; and
  • It appeared “there was no exploration of other approaches besides the ‘blanket’ carve out that was legislated"; the legislative provisions could have been “better tailored” to preserve the financial viability of workplace benefit plans.

Ultimately, the HRTO found the violation of this teacher’s rights was not justified under s. 1 of the Charter, Rudner says.

“It is no surprise that many Canadians are working past age 65. In some cases, it is because they want to,” he says. “In others, they have to keep working because they can’t afford to retire. There is no justifiable reason to have a blanket rule allowing employers to offer them lesser or no benefits at all when younger employees have them.”

In light of the HRTO ruling, employers must review their plans to ensure they aren’t “discriminating against older workers,” Rudner says.

“There is a bigger issue, however. As I have said many times since this legislation came into force, it had one significant unintended consequence: it caused many employers to discriminate against older workers by choosing not to hire anyone approaching ‘normal’ retirement age due to the uncertainty as to how long they would be ‘stuck’ with them,” he says.

“In contrast, when mandatory retirement existed, those employers knew that the relationship could only last for a fixed period," Rudner says.

“Similarly, in the ‘old days,’ if you had an older worker that might be slowing down or not performing as they used to, employers would allow them to stay until they turned 65 and then retire with dignity," he says. "Now, there is no clear end date; the employee might decide to work for another 10 years. So what is the employer to do?”

If employers rely on performance management, “they may well face a claim of discrimination,” Rudner says.

“If they dismiss the employee (even without cause), they may face a similar claim,” he says.

“This can be a challenging situation which calls for a delicate and compassionate approach. To that end, there are some organizations out there who can help employees ease into new roles that are more suitable; in some cases, they can work with their employer to become more of a mentor, and continue to contribute positively to the organization, which can be a real win-win,” Rudner says.

The abolition of mandatory retirement has also meant that there are situations where older workers who might otherwise retire with no compensation are waiting to be “packaged out,” he says.

“It becomes a game of chicken; you have employees waiting for a package and employers who don’t want to give it, waiting for the employee to give up and retire,” Rudner says.

“Clearly, with average lifespans increasing, it makes sense to get rid of any rule requiring people to stop working at age 65," he says. "But this change has had unintended consequences which have negatively impacted those it was intended to help. At least one negative impact that was apparently intended — the ability for employers to discriminate against older workers when offering benefits — has now been removed.”

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