The aging Canadian workforce is creating significant HR challenges for employers. What you can do to move older employees on without ending up in court
One of the greatest challenges organizations face today is how to deal with older employees. Following the abolishment of mandatory retirement in 2006, Canadians are now working well into their 60s, 70s and even 80s.
Employers face the prospect of transitioning out a generation – the baby boomers – who have been in the workforce for longer than any before it. In managing this changing of the guard, companies need to be mindful of avoiding age discrimination. The Human Rights Codes in Ontario and other provinces specifically prohibit discrimination based on age, including terminating a worker because they’re past a certain birthday.
In practical terms, age discrimination is most likely to become an issue around the established legal principle of reasonable notice, which requires that companies provide a to-be-terminated employee with an adequate severance package that takes into account his or her length of service, character of employment, likelihood of finding a comparable position, and of course, the age at the time of termination.
For older employees, the combination of age, years of service and the elevated positions they often hold is likely to add up to a significant transition package or award from the courts.
In a recent Ontario decision, Hussain v Suzuki, the judge ruled that a 65-year-old worker who had been employed for 36 years had a “1% chance of finding new employment at his age.” The court awarded the plaintiff 26 months’ notice of termination, and ordered Suzuki to pay almost $20,000 in interest and costs. In its decision, the court found that the employee was in the “twilight if not at the end of his working years,” a factor that served to increase – not decrease – the notice period in his case.
In another recent Ontario case, Filiatrault v Tri-County Welding Supplies Ltd., two senior employees in their 80s were each awarded 18-months’ notice. But the court also acknowledged that the structure of reasonable notice is likely to change with an increasing number of older workers. In his decision, the judge commented that durations of employment that have attracted higher notice periods have rarely – if ever – been as great as 40 years, but that such long tenures are likely to become more frequent given the statutory end to retirement at age 65.
The ultimate objective for any employer that wishes to transition out an older employee is to achieve a “win-win” solution whereby both the organization and individual benefits. For the company, the goal is to minimize costs and risk, and ensure there is a successor who can step into the outgoing worker’s position. For the individual, the desire is to exit with dignity and grace while feeling positive about the decision and having some control of the time that it occurs.
Here are some practical tips for employers to keep in mind when considering the transition of an older employee.
- Identify a broad range of alternatives to termination and costing scenarios. Employers may want to consider providing working notice, perhaps in combination with pay, which would allow the departing employee an easier transition. Don’t try to nickel and dime an older employee on their severance package – it may just end up costing you more if they file suit.
- Think about the short and long-term impact on co-workers, clients and the business as a whole. Older employees often have a significant amount of organizational knowledge, and employers should try to find ways to capture this information and transfer it to successors in the business.
- Define the time period until the transition and stick to it! There is a tendency to avoid dealing with these delicate issues – prolonging the matter will only make it worse.
- Actively involve the employee in the transition process. Ask them for their input in terms of timing—how long the transition period should be – and logistics – what the message should be to co-workers and clients and when and how it should be communicated.
- Give adequate notice and do not rush the decision. Allow the older employee to negotiate terms and to take the time they need to digest the transition package.
- Be open-minded even if it is does not feel natural for you. An employee’s preferred transition package and timeline may not be consistent with other terminations in your business. But the process of moving on older employees can be more complex than for other workers, so some flexibility may be in order.
- Celebrate an outgoing employee’s time with your organization, if it makes sense to do so. You may want to hold a formal retirement event or a more intimate invitation-only party with a group of close co-workers. Alternatively, they may prefer to ride quietly into the sunset without any fanfare.
- Follow up after the transition to check in and see how they are doing. Reach out to the former employee post-transition to ensure that they are feeling comfortable.
- Offer outplacement services in a proactive manner, and don’t make them conditional on signing the release.
This article was originally published on Benefits Canada’s sister site, ProfitGuide.com.