When Ontario abolished mandatory retirement in 2006, employers could still terminate benefits for workers who turned 65. But in May, the province’s Human Rights Tribunal determined the provision in the Human Rights Code that allowed employers to do so was unconstitutional.

Previously, employers often offered benefits to older workers to encourage them to stay and cut benefits at 65 if they wanted to encourage retirement, says Tiina Liivet, vice-president of benefits and health at Accompass Inc. in Toronto.

But she isn’t at all surprised by the tribunal’s decision, noting the provision was at odds with the ban on mandatory retirement. “I think it’s taken a while [for someone to] feel strongly enough about it to take it to the Human Rights Tribunal,” she says.

Have your say: Did the tribunal of get it right on terminating benefits at age 65?

That someone turned out to be Steve Talos, a high school teacher at the Grand Erie District School Board. In large part, he seeking to keep teaching past age 65 because his wife required expensive medication following a diagnosis with ovarian cancer. But the school board didn’t provide benefits to teachers over age 65, so Talos brought a complaint to the Human Rights Tribunal, alleging age discrimination.

The tribunal originally determined the board’s defence was valid, as a section of the Human Rights Code permits pension and benefit plans to treat workers older than 65 and younger than 18 differently than their colleagues. So Talos argued that provision was unconstitutional as it violates the Canadian Charter of Rights and Freedoms.

In an interim decision issued on May 18, the tribunal agreed with Talos, noting it’s unfair that 65-year-old employees who perform the same duties as their 64-year-old colleagues have their benefits cut — which amounts to reducing their compensation — just because of their age.

Read: Court dismisses age discrimination appeal in long-term disability case

An actuary brought in as an expert witness for Talos submitted that health benefits for employees aged 60 to 64 are the most expensive. Furthermore, because Ontario covers most drug costs for residents aged 65 and over, it costs employers the same to include an employee who’s between the ages of 65 and 79 on the benefits plan as it does to include workers in their 40s. The actuary brought in by the school board ended up preferring that data and analysis to his own.

The tribunal accepted there was a rational connection between the Human Rights Code provision and the legislative objective of protecting the financial viability of benefits plans but concluded the law is neither minimally impairing nor proportional. It noted other alternatives were available, such as requiring age-based distinctions in workplace benefits plans to be “reasonable and bona fide” or necessary to prevent undue hardship for the employer.

Talos is “very happy with the decision,” says Jamie Melnick, the London, Ont.-based lawyer who represented him. “He feels it’s a victory for older workers.” 

If neither the school board nor the Ministry of the Attorney General of Ontario, which joined the school board as an intervener, appeals the decision, the parties have until early July to agree to mediation or have a hearing to figure out a solution. Talos seeks $160,000 for lost benefits and “compensation for injury to dignity, feelings and self-respect.”

Read: What are employer’s options for reducing risk in retiree health plans?

However, the tribunal doesn’t have the authority to strike down laws. So while its decision only affects Talos, it would be persuasive if other employees lost their benefits upon turning 65 and decided to bring forward a complaint.

“My hope is that employers will look at a decision like this [and change their benefits policies] and [Queen’s Park] will look at this and say we need to change the Employment Standards Act and the Human Rights Code,” says Melnick. “There’s a tidal shift happening here. Workers are staying longer. They’re therefore getting older. And, based on the evidence put forward at the tribunal, for certain sizes of employers, it’s not cost-prohibitive to provide many extended health-care and dental benefits.”

The tribunal’s ruling on terminating benefits at age 65 is the subject of Benefits Canada‘s weekly online poll. Did the tribunal get it right? Don’t forget to have your say.

Copyright © 2020 Transcontinental Media G.P. Originally published on benefitscanada.com

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I think it’s important to make the distinction here that we’re talking about health & dental benefits only, not life insurance and disability, which are in most cases cut off by insurers at age 65 and the employer doesn’t have much of a say in that.

Friday, June 01 at 11:20 am | Reply

Dave Patriarche:

Though the challenge was inevitable, there is a part of this that no one has considered (at least publicly). Termination of life, health and dental benefits for those over age 65 may vary only slightly in cost, from those under, but Long Term Disability (LTD) coverage has far greater repercussions.

If a plan cannot end LTD benefits at age 65, many employees would work until disability, creating a benefit that was unaffordable. Insurers faced with complying with the law would likely have to find a lower risk, affordable option to offer employers.

I would guess that what we might see, would be an LTD benefit with something like a flat 5 year benefit (rather than coverage to age 65). Affordable for sure, and it could handle the working 70 year old being disabled as the benefit of 5 years would provide a maximum risk, but at what cost?

The downside? A 30 year old permanently disabled employee would have coverage end at age 35 with nothing but CPP disability benefits for the remainder of their life. Far from ideal.

Although there is discrimination in employee benefits (termination age is just one area), I think that maintaining the current limitation (at least on LTD) needs to be maintained in order to provider a greater good not just to employees but society at large.

Friday, June 01 at 11:24 am | Reply

Cathleen Wright:

What is the CLHIA doing about the insurance industry who are still following the gov’t lead particularly surrounding disability coverage, but on some small business packaged products as well. The industry needs to grapple with the fact that folks don’t leave work at 65 or even 70, but work as long as they want to, are able to, or in some cases, must.

Friday, June 01 at 12:23 pm | Reply


Now here’s a sleeper issue for us to consider.

Let’s see if someone has the stamina now to challenge OTIP’s recent cut to teachers’ actual in-force LTD schedules based on credited service for pension accruals. In other words, the % income replacement rate now decreases with years of service–which of course is a proxy for age. The older you are, the less you get.

Quite the admission of OTIP’s failure to manage adverse LTD incidence and duration (i.e. beyond the actuarial assumptions) for older teachers. The unions appear to have just rolled over on this one. Quite astounding.

Monday, June 04 at 10:11 am | Reply

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