Foster v. Nova Scotia (Human Rights Commission), 2015 NSCA 66
As discussed in the June 2014 Pensions Newsletter, effective July 1, 2009, the Nova Scotia legislature passed An Act Respecting the Elimination of Mandatory Retirement (MRA). The MRA made a number of amendments to the Nova Scotia Human Rights Act (Act) and the Labour Standards Code. One such change was to amend the Act to remove subsection 6(h), the exemption from the age discrimination provisions of the Act for “a bona fide plan, scheme or practice of mandatory retirement.” Subsection 6(g) of the Act continued to provide an exemption from the age discrimination provisions of the Act for a “bona fide pension plan.”
Prior to July 1, 2009, the Cape Breton Regional Municipality (CBRM) had a mandatory retirement policy in place and the defined benefit plan in which the CBRM employees participated included a mandatory retirement provision. A defined contribution pension plan for CBRM employees (DC Plan) did not include an express mandatory retirement provision, but members were subject to the CBRM mandatory retirement policy. With the changes to the Act, the mandatory retirement policy was no longer enforceable. CBRM responded by approving an amendment to the DC Plan that provided for mandatory retirement at the age of 65.
After he was forced to retire at age 65, Mr. Foster brought a complaint before the Nova Scotia Human Rights Board of Inquiry (Board) alleging discrimination on the basis of age. CBRM argued that the DC Plan was a “bona fide pension plan” under subsection 6(g) of the Act and therefore the mandatory retirement provision was not a violation of the Act.
The Board applied the Supreme Court of Canada’s analysis for determining what constitutes a bona fide pension plan as set out in New Brunswick (Human Rights Commission) v. Potash Corporation of Saskatchewan Inc., 2008 SCC 45 (Potash). Considering the objective and subjective requirements set out in Potash, the Board concluded that the DC Plan maintained its bona fide status and protection under the Act and dismissed Mr. Foster’s complaint. Mr. Foster appealed.
The Nova Scotia Court of Appeal dismissed the appeal and held that the Board had carefully and correctly analyzed the principles from Potash for determining whether a pension plan was bona fide in the context of a mandatory retirement complaint and had reached a reasonable conclusion. The Board came to the reasonable conclusion that a well-funded, registered defined contribution plan with a significant number of members was not a sham and met the subjective element of the test for a bona fide pension plan. The Board concluded that the amendment to the DC Plan was made in good faith and for the valid policy reason to treat all employees equally. Finally, the Board reasonably rejected Mr. Foster’s argument that the DC Plan lost its bona fide status because the amendment was made to defeat the purpose of the MRA and was not required for the operation of the DC Plan. The Board came to the correct conclusion that the MRA was not intended to restrict an employer’s ability to amend a pension plan to making only those amendments necessary for the operation of the plan.