Most employers will now be aware that effective January 1, 2008, mandatory retirement will end in British Columbia. In making this change, B.C. will fall into step with most other Canadian provinces, including Ontario, which ended mandatory retirement on January 1, 2006.
The elimination of mandatory retirement in British Columbia will be achieved through a change in the definition of "age" under the Human Rights Code (British Columbia) ("Code"). Although "age" is presently a prohibited ground of discrimination under the Code, legal protection is provided only to employees between 19 and 65 years of age. The amendments to the Human Rights Code will extend protection to employees who are age 65 years or older.
Presently, employers in British Columbia are at liberty to require mandatory retirement at age 65, either through negotiated provisions in a union collective agreement, or as a result of imposed corporate policies, or negotiated terms within individual contracts of employment. As a result of the amendment to the Human Rights Code, employers in British Columbia will no longer be able to rely on any such corporate policies, collective agreement provisions, or individual contract terms which may require retirement at age 65.
Although employees will gain the right to remain employed beyond the age of 65 years should they choose to do so, it is important for employers to understand that they will still be able to rely upon age-based distinctions which may be contained in bona fide retirement, superannuation or pension plans, or bona fide group or employee insurance plans.
For example, many if not most long-term disability plans do not provide coverage or benefits beyond 65 years of age. Similarly, many pension plans provide that employee contributions must cease and benefits must commence at a specified age. Thus, although the change in the law will give employees the right to work beyond 65 years of age, there will be no requirement that the benefits which are provided to older workers will necessarily be the same as those which are provided to employees who are younger than 65.
One question that some employers are asking is whether the change in the Human Rights Code will provide for any exceptions which could permit employers to institute a blanket mandatory retirement at a particular age, depending on the nature of the business. Although it is possible in certain safety-sensitive industries, in the vast majority of circumstances employers will be obliged to make individual assessments about the mental and physical capacities of employees in determining whether or not they are able to continue to work in a safe and productive manner.
For many employers, the change in the law may not be a matter of concern, especially in a buoyant economy where there are more jobs than there are available employees. Many employers recognize that older workers have the experience and skills which make them a valuable addition to the workforce. However, in other cases, employers may also be concerned about how the change in the law may affect the ability to address such circumstances where the performance levels or capabilities, or sometimes enthusiasm for the job, has begun to diminish.
Previously, employers who establish mandatory retirement policies had the luxury of not being required to make individual assessments about the capabilities of employees, a luxury which no longer exists. Accordingly, employers will need to pay more attention to performance management over the entire course of an employee's career, in order to gauge and monitor changing levels in performance or capacity. Employers may also want to consider developing attractive voluntary retirement packages which will hopefully avoid the necessity of dealing with employees who may have simply decided to remain working for too long. Doing so may assist in continuing the employment relationship only for that period of time during which it is in fact in the best interests of both the employer and the employee to do so.
It remains to be seen exactly how the change in the law will reshape the employment landscape in British Columbia. We will be sure to keep our clients informed of developments as they occur in 2008 and beyond.