When the Ontario government changed its human rights legislation in 2006 to prohibit age discrimination in employment for persons aged 65 or older, it left in place an exception in its Human Rights Code and Employment Standards Act allowing for employers to discontinue or reduce benefits of employees aged 65 or older. Recently, the Human Rights Tribunal of Ontario (“HRTO”) in Talos held that these statutory provisions are discriminatory and contrary to the Charter. Although this legislation is still in effect, the implications of the Tribunals findings are likely wide-ranging.

Mr. Talos worked as a teacher for the Grand Erie District School Board for 38 years. On his 65th birthday his employee benefits were discontinued. The HRTO, in a decision dated May 18, 2018, found that these statutory provisions are unconstitutional under s. 15 of the Charter in preventing employees from challenging a reduction or cut off of benefits as age discrimination under the Code. The HRTO also found that these laws could not be justified under s. 1 of the Charter as the goal of preserving the financial viability of benefits plans could be achieved by less drastic measures than a blanket carve-out of employees over 65.

The HRTO’s determination was limited in that it applied to extended health, dental and modified life insurance benefits and excluded long-term disability, pensions and superannuation funds. Mr. Talos was able to demonstrate based on actuarial evidence that the extension of benefits to employees between the ages of 65 and 79 did not significantly increase the total cost of benefits plans.

Though the HRTO cannot issue a general declaration of invalidity that would apply to other courts and tribunals, it will now likely cease to apply those sections and allow for employees to challenge benefits cut-offs and reductions as age discrimination. It is expected that this statutory exception will be the subject of further litigation in Ontario in the near future.

What does this mean for employers and employees in British Columbia? Since 2008 employees over age 65 are entitled to age discrimination protection under the British Columbia Human Rights Code (the “BC Code“). Unlike Ontario legislation, the BC Code does not contain the categorical exemption for employees over age 65. Rather, s.13(3)(b) of the BC Code provides that the prohibition against age discrimination in employment does not apply to a “bona fide group or employee insurance plan.” The BC Court of Appeal has held that the purpose of this section is to protect the actuarial aspects of insurance plans.[1]

The BC Human Rights Tribunal has wavered on whether cutting off benefits at 65 can be an aspect of a bona fide plan, and has yet to issue a definitive decision on what legal test applies. Further, in late 2017, the BC Supreme Court in Duncan v. Retail Wholesale Union Pension Plan overturned a decision of the BC Tribunal interpreting s. 13(3)(b) and directed the Tribunal to consider Charter values in interpreting the meaning of “bona fide.” Though that decision concerned pension plans, the same requirement to consider the Charter likely applies to the interpretation of what constitutes a “bona fide group or employee insurance plan.”

The Talos decision provides useful guidance to the Human Rights Tribunal and courts in BC. To reduce the risk of litigation, BC employers should consider what the actuarial justifications are for any age differentiation in benefits provided, and may wish to consider the cost-effectiveness of providing benefits to a later age as the average age of retirement in Canada continues to rise.