Succession and transitional planning is an important and necessary process in any organization, especially where a significant number of employees are nearing retirement.  However, employers must be aware of the risks associated with their succession and transition plans, particularly where employees at or near retirement wish to continue working.  Cowling v. Alberta Employment and Immigration, a recent decision of the Human Rights Tribunal of Alberta (the Tribunal), serves as a good reminder of those risks.

In Cowling, the complainant, a 67 year old labour relations officer (LRO) that had been employed by the Department of Human Services for 8 consecutive years on a series of contracts alleged that she was denied continuing employment and discriminated against due to her age.  She had been notified approximately 1 year prior to the expiry of her latest contract that it would not be renewed.  The reason given by the employer was that it planned to restructure the position she held, downgrading it a level from LRO 3 to LRO 2.

When the competition for the LRO 2 position opened, the complainant applied and was interviewed, but she was not successful, and neither were the other 110 applicants.  Shortly after the unsuccessful LRO 2 competition, and after her contract expired, the employer redefined the LRO 3 position again, this time as labour relations advisor, a management position that was materially the same as the position that she had held for 8 years.  In the staffing request for the LRO 3 position, the complainant’s name was even included as the previous incumbent.  The complainant was aware of and could have applied for the job, but, due to confusion regarding the closing date, she did not.

After reviewing the evidence, the Tribunal held, among other things, that it was reasonable to infer that age was a factor in the denial of her continued employment, given the circumstances surrounding the employer’s restructuring and the non-renewal of her contract after 8 years of exemplary service.  The Tribunal further held that, while succession and transitional planning is generally a legitimate and necessary process in any organization, it did not, in these circumstances, provide a credible explanation for the denial of her continued employment.

After concluding that the evidence strongly supported a finding of age discrimination, the Tribunal ordered that she be reinstated, and that she be paid 5 years’ of lost wages at a discounted rate, together with general damages of $15,000, interest and costs.

Our view:      

This case illustrates how serious the consequences can be for employers that do not properly manage their succession and transition plans, particularly where employees at or near retirement wish to continue working.  In order to avoid claims, employers must ensure that their plans and policies respect the rights of such employees, as well as their obligations pursuant to human rights legislation.