Forced to Retire? Early Retirement in Ontario and Human Rights issuesachkarlaw-admin
At some point in an individual’s career, retirement will be nearing, and the employee will choose when is the right time for them to retire. The decision to retire is up to the employee, and employers cannot force an employee to retire, leaving the employee with the right to work until the age they choose to.
However, employers may draft a retirement policy which can be agreed to as part of the employment agreement prior to the employee agreeing to and signing the employment agreement. These policies may place a cap on the age that an employee is to retire, and may result in an early retirement in Ontario. If the employee agrees to the policy after a careful independent review, then the policy can be enforced, and the employee would be required to retire by the age specified in the policy.
Human Rights Code and Early Retirement in Ontario
Both federal and provincial employees are protected from discrimination on the basis of age via Ontario’s Human Rights Code for provincial employees, and the Canadian Human Rights Act for federal employees. Both pieces of legislation protect employees above the age 18. Previously, employees only up to the age of 65 were protected, whereas now the protections are broader. Employees aged 65 and older who believe that they have been discriminated against on the basis of age, including through mandatory retirement policies which they did not agree to, may file a complaint of discrimination on the basis of age.
There are instances where the job duties of the employee have a requirement that inadvertently leads to discrimination on one of the protected grounds. In cases of retirement, if the employer can establish that there is a Bona Fide Occupational Requirement (“BFOR”) which cannot be met by an employee over a particular age, then a mandatory retirement may be warranted.
The Supreme Court of Canada established a 3 pronged test to determine if a requirement is in fact a BFOR. The courts would analyze the requirement and determine whether the requirement:
- Was adopted for a purpose or goal that is rationally connected to the function being performed
- Was adopted in good faith, in the belief that it is necessary to fulfill the purpose or goal
- Is reasonably necessary to accomplish its purpose or goal, in the sense that it is impossible to accommodate the claimant without undue hardship.
The Canadian Human Rights Act and Canada Labour Code also states that no federal employees can have mandatory retirement. Employer may initiate a fitness test to determine whether the employee is able to perform the essential duties of the job.
If an employer chooses to terminate an employee who is a senior, they are required to provide reasonable notice or pay in lieu as per the Employment Standards Act. The decision must not be made due to age unless there was a clear, unambiguous policy that the employee agreed to when they signed their employment agreement.
Employees can rescind their notice of retirement even if the employer has accepted the notice of retirement. In the case of English v. Manulife Financial Corporation, 2019 ONCA 612, the employee decided to retire as he did not want to be trained for the new computer system. After retirement, the employer decided to not implement the new system. The court of appeal found that the retirement notice was not clear and ambiguous, and the supervisor requested that the employee considered their decision carefully prior to confirming it. As such, the employee was able to rescind their notice of retirement and return back to work.
If an employer wishes to implement a workplace policy regarding early retirement in Ontario, they should be careful to ensure that the policy is free from any intended or inadvertent discrimination, and that any discrimination falls under a BFOR as outlined above. Employers should ensure that any such policy is presented to the employee as part of their employment agreements, prior to the signing of the employment agreement.
Our trusted employment lawyers and labour lawyers have experience in drafting and implementing workplace policies.
If you are an employer and wish to implement a retirement policy, or an employee who has faced discrimination in the workplace and forced into early retirement in Ontario, our team of experienced workplace lawyers at Achkar Law can help. Contact us by phone toll-free at 1 (800) 771-7882 or email us at [email protected] and we would be happy to assist.