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.
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.
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.”
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.