Recent decision of the Tribunal finds that mandatory retirement violates the Canadian Charter of Rights and Freedoms

Although mandatory retirement constitutes a form of age based discrimination, it was, until recently, permitted in many Canadian jurisdictions. This was facilitated by exemptions in the relevant human rights legislation which permitted mandatory retirement, generally at the age of 65. Mandatory retirement, however, has been unlawful in Quebec and some other provinces for a number of years. More recently, it has been banned in virtually all Canadian provinces.

The federal government has not moved to abolish mandatory retirement in relation to employees of federally regulated employers. The legislative exception is found in section 15(1)(c) of the Canadian Human Rights Act (the “CHRA”) which provides that it is not a discriminatory practice “if an individual’s employment is terminated because that individual has reached the normal age of retirement for employees working in positions similar to the position of that individual.”

The validity of section 15(1)(c) of the CHRA has now been called into question. In the recently released decision of the Canadian Human Rights Tribunal (“Tribunal”) in Vilven & Kelly and Air Canada, the Tribunal ruled that section 15(1)(c) was ineffective because it was contrary to section 15 of the Canadian Charter of Rights and Freedoms (the “Charter”).

Messrs Vilven and Kelly were pilots who were formerly employed by Air Canada. For many years, Air Canada has had a policy which required pilots to retire at age 60. Mr. Vilven was retired pursuant to that policy in 2003 and Mr. Kelly was required to retire in 2005. Both filed human rights complaints. The Canadian Human Rights Commission (“CHRC”) investigated and referred their complaints to the Tribunal. In a 2007 decision, the Tribunal initially found that Air Canada was permitted to require both Vilven and Kelly to retire at 60 because section 15(1)(c) of the CHRA permitted the airline to have a policy of mandatory retirement as long as it was consistent with the retirement age of similarly placed employees. Air Canada satisfied the Tribunal that the retirement age for most pilots working for major, international carriers was 60. The Tribunal also found that section 15(1)(c) of the CHRA was not contrary to the Charter.

Messrs Vilven and Kelly applied for judicial review. In April, 2009, the Federal Court concluded that the Tribunal had incorrectly analyzed the application of the Charter to section 15(1)(c) of the CHRA. The Court referred the matter back to the Tribunal for further consideration.

On August 28, 2009, the Tribunal released its second decision concerning the complaint of Messrs. Vilven and Kelly. In its second decision, the Tribunal found that section 15(1)(c) of the CHRA was inconsistent with the equality provisions of the Charter. In doing so, the Tribunal found that it was not bound by decisions of the Supreme Court of Canada issued in the early 1990s which concluded that mandatory retirement exemptions in the human rights legislation then in effect in several provinces did not violate the equality provisions of the Charter. The Tribunal found that the Supreme Court of Canada cases were distinguishable based on current circumstances, including the fact that many provincial jurisdictions had since abolished mandatory retirement.

We understand that an application for judicial review of the Tribunal’s second decision in this matter has been initiated. While the issue of the validity of section 15(1)(c) of the CHRA and mandatory retirement in the federal sector may ultimately be determined by the Courts, employers in the federal sector should be alert to the possibility that the application of a mandatory retirement policy may be challenged through a complaint to the CHRC or, for unionized employers, through a grievance. The CHRC, the Tribunal and, quite likely, an arbitrator appointed pursuant to a collective agreement may follow the decision of the Tribunal in Vilven & Kelly. Federally regulated employees may be wise, therefore, to review the continued application of mandatory retirement policies.