A. THE OLD LAW

The Ontario Human Rights Code (“Code”) has always protected individuals in their employment from discrimination on the basis of age. “Age” was defined, however, as being more than 18, and less than 65 years old. Once an individual turned 65, in other words, he or she was no longer protected by the proscriptions of the Code. That left it open to employers to require their employees to cease working at age 65.

B. THE NEW LAW

The definition in the Code has now been amended to extend the protection to any individual of an age that is “18 years or more”. Mandatory retirement, or telling employees that they must retire once they reach 65, is no longer lawful. That is the only change that the law has made. Agebased distinctions in benefit plans are expressly allowed to continue. In addition, the government has allowed itself to continue to close off an employee’s entitlement to Workplace Insurance benefits at age 65 (meaning that employers need to be looking at the kind of insurance they have in place to protect themselves from workplace injury lawsuits brought by employees who continue in their employment past 65).

C. HOW DOES AN EMPLOYER NOW GO ABOUT TERMINATING THE EMPLOYMENT OF AN EMPLOYEE WHO IS AGED 65 OR MORE?

The answer is (relatively) simple: the same way it does with respect to any other (younger) employee. The employer can either give reasonable notice of termination or it can discharge the employee for cause.

In the former instance, the employer must be able to show that the selection of that older employee for termination is not simply a matter of age (because that is, once again, the kind of discrimination that is now prohibited). And the notice period found by the Courts to be appropriate to permit a post 65-year-old to find comparable employment elsewhere could be substantial. In the latter instance, the case for cause must be developed fairly and be well documented to allay any suspicion that the employer’s action is once again motivated by a bias against age. Improvements may have to be made to the workplace in general in terms of the availability of job descriptions or the clear articulation of expectations, and in terms of regularized and documented “performance management” processes.

D. HOW BIG A PROBLEM ARE THESE NEW RESTRICTIONS ON TERMINATING OLDER EMPLOYEES LIKELY TO BE FOR EMPLOYERS?

It may not be the problem at all. One of the reasons behind the legal change is demographic. Canada, as with other western societies, is quickly approaching the point where it will not have enough new members entering the work force to replace the ones that are leaving. That is particularly true at the higher-skilled level. Whether this continues through and after the recession of 2009 remains to be seen.

E. SO WHAT SHOULD WE AS AN EMPLOYER BE DOING?

Analyze your staffing profile and determine what steps you should be taking to replace the employees you are counting on leaving. Conversely determine what employees are effectively irreplaceable and in need of incentives to ensure that they continue to provide services.

(a) How do we encourage employees whom we would like to leave to do so voluntarily?

Voluntary exit packages and early retirement incentives are the traditional methods. A gradual phasing down of hours may also be more palatable than a decision by an employee to move from forty hours a week to zero. Giving employees an opportunity to maintain some form of attachment to the workplace, for example on special projects or in training programs for junior employees, may ease the transition as well. And of course, an attractive pension plan is a key motivator in causing employees to opt for retirement.

(b) How do we encourage employees to stay?

Workplace re-structuring or ergonomic aids may make the continuance at work of older employees more feasible and/or attractive (and the law on accommodation for disabilities may require employers to take these steps in any event). Flex-time, working at least partly from home, and the tailoring of duties more appropriate to the employee’s career-stage may also make staying more attractive. Other options include the invitation for older employees to participate in new learning or growth opportunities in the workplace. But perhaps foremost, very often what employees at a later stage in their life want is not no work, but less work, and the freedom to take a greater degree of leaves can be an effective way of persuading key employees to maintain their role in the organization.