It is well-established that the act of forcing an employee to retire based solely on his age amounts to discrimination pursuant to the Charter of Human Rights and Freedoms (the Charter). Moreover, the Act respecting Labour Standards stipulates that an employee is entitled to continue to work despite the fact that he has reached or passed the age or number of years of service at which he would be entitled to receive retirement benefit, pursuant to a retirement plan or the common practice of his employer.
Are the employer’s obligations as clear with respect to distinctions based on age provided by a pension plan implemented by the employer?
On March 24th, 2011, the Quebec Court of Appeal rendered a decision stating that a distinction based on age in a pension plan implemented by the employer does not amount to discrimination within the meaning of Section 10 of the Charter.
In this case, McGill University had implemented a private pension plan for its employees subject to the Supplemental Pension Plans Act (the Pension Act). The pension plan established 65 years old as the age of retirement.
McGill undertook, as of January 1, 1997, to contribute to the plan for those members who remained employed up until they would reach the age of 69.
It was only in 2007 that federal legislation pushed back the age of mandatory conversion to 71 years old, at which date members start receiving benefits payments. The teachers requested that their employer’s contributions continue until they reach the age of 71 years old. While McGill University did comply with the federal legislation with respect to the age of mandatory conversion, it refused to contribute to the pension plan beyond the age of 69.
According to the teachers, their employer was depriving them of benefits to which they are entitled, because of their age. This situation would thus amount to discrimination in violation of section 10 of the Charter.
Court of Appeal Decision
The Court of Appeal states that the provisions of the Pension Act does not impose obligations with respect to the contributions after the normal age of retirement (ie. 65 years old), whether they are member or employer contributions. The only obligation is the necessity to defer the payment of the normal allowance of a member who remains employed after the normal age of retirement. Thus, after the age of 65, contributions are strictly optional.
The Court of Appeal establishes that the Pension Act does not deprive a member from any right during the adjournment period, but clearly provides that the employer is not required to concurrently contribute to the contributions made by employees. Thus, according to the Court of Appeal, McGill University was entitled, in 2007, to limit its contributions to members younger than 69 years old.
As such, the Court of Appeal states that the employer has no obligation other than the one established by the Pension Act concerning the age at which a member may benefit from his retirement allowance or stop contributions despite remaining employed. That age is established at 65 years old under the Pension Act.
Moreover, the Pension Act establishes that the plan may provide that the payment of contributions will stop when a member reaches the age of retirement, but if the plan provides that contributions must be paid during the adjournment period, these contributions must then comply with the provisions of the Pension Act.
In this case, according to the Court of Appeal, McGill University had complied with these provisions and was entitled to stop paying contributions at the age of 69, which is more generous than the age of 65 provided for by the Pension Act. McGill had no obligation to make employer contributions for employees beyond 69 years old. The distinction which may arise from this situation is provided for by the law and accordingly does not amount to discrimination within the meaning of Section 10 of the Charter.