The Federal Court has ruled that the termination of long-term disability benefits for employees who become eligible to receive unreduced pension benefits doesn’t amount to age discrimination.

The case arose from the terms of a collective bargaining agreement between Air Canada and the Air Canada Pilots Association. The agreement provided that pilots were eligible to retire with an unreduced pension at age 60 with 25 years of service or otherwise at age 65. The agreement also included a group disability income plan for pilots on LTD. Pilots who were eligible for an unreduced pension, however, didn’t qualify for LTD if they became unable to work.

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When Roy Bentley, a pilot, turned 60 and learned he wouldn’t receive LTD benefits if he became disabled, he filed a human rights complaint. He alleged the disentitling provisions were discriminatory on the basis of age and the union supported his application.

Air Canada presented an actuarial report to the court. It concluded that, from a cost-effectiveness standpoint, it was appropriate to replace loss-of-income benefits with retirement benefits between ages 61 and 65 and that reference to pensionable age was a reasonable proxy to recognize an employer’s specific retirement experiences.

“The uncontested evidence . . . was that indefinite disability benefits plans are not viable,” wrote Justice Angela Furlanetto in her decision. “Without a limit, the cost of insurance would be too high. Plans become unviable where workers are between the age of 61 and 65.”

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The Canadian Human Rights Act states that an insurance plan doesn’t violate the Act if the regulations permit the impugned discrimination. In fact, the regulations specifically allow employers to cut off disability benefits from employees who are at “normal pensionable age under the pension plan of which the employee is a member.”

The union argued the regulatory exemption offended the equality rights guarantee in subsection 15(1) of the Charter of Rights and Freedoms. Furlanetto concluded that, while the impugned regulation was indeed a distinction based on age, it wasn’t the determinative question. “The issue is whether [the provision] draws a discriminatory distinction by denying a benefit in a manner that reinforces, perpetuates or exacerbates disadvantage as an employee gets older and reaches pensionable age.”

The impugned regulation was based on stakeholder recommendations following lengthy consultations, “which included balancing the interests of employers, employer organizations, underwriters of benefits plans, benefit consulting firms, other human rights administrators and interested organizations.”

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Furlanetto said the goal of the Canadian Human Rights Commission in creating the exception was to recognize that “some differentiation with respect to age . .  . is not always undesirable in such plans” and noted the “normal pensionable age” distinction was made in good faith. “It is not targeting groups for illegitimate reasons outside of the overall scheme.”

She also recognized Section 15 of the Charter ensured “substantive equality” for all employees, while the impugned regulations and provision in the agreement weren’t discriminatory but, in fact, “safeguarded” the equality right. “This does not mean that all workers will have the exact same disability coverage because they are workers,or that there will be formal equality between older and younger workers. Rather, it requires that all workers be eligible to a form of compensation for loss of salary based on disability.”

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