When Ontario abolished mandatory retirement in 2006, employers could still terminate benefits for workers who turned 65.
But in May, the province’s Human Rights Tribunal determined the provision in the Human Rights Code that allowed employers to do so was unconstitutional.
Steve Talos, a high school teacher at the Grand Erie District School Board, brought a complaint to the Human Rights Tribunal, alleging age discrimination. He wanted to keep teaching past age 65 primarily because his wife required expensive medication following a diagnosis with ovarian cancer. But the school board didn’t provide benefits to teachers over age 65.
The tribunal originally determined the board’s defence was valid, as a section of the Human Rights Code permits pension and benefit plans to treat workers older than 65 and younger than 18 differently than their colleagues. So Talos argued that provision was unconstitutional as it violates the Canadian Charter of Rights and Freedoms.
In an interim decision issued on May 18, the tribunal agreed with Talos, noting it’s unfair that 65-year-old employees who perform the same duties as their 64-year-old colleagues have their benefits cut — which amounts to reducing their compensation — just because of their age.
The tribunal accepted there was a rational connection between the Human Rights Code provision and the legislative objective of protecting the financial viability of benefits plans but concluded the law is neither minimally impairing nor proportional. It noted other alternatives were available, such as requiring age-based distinctions in workplace benefits plans to be “reasonable and bona fide” or necessary to prevent undue hardship for the employer.
If neither the school board nor the Ministry of the Attorney General of Ontario, which joined the school board as an intervener, appeals the decision, the parties have until early July to agree to mediation or have a hearing to figure out a solution. Talos seeks $160,000 for lost benefits and “compensation for injury to dignity, feelings and self-respect.”
However, the tribunal doesn’t have the authority to strike down laws. So while its decision only affects Talos, it would be persuasive if other employees lost their benefits upon turning 65 and decided to bring forward a complaint.
At this time, our insurer partners seem to be taking a wait and see attitude and are not discussing as to how they would price and administer changes in the benefit termination age. The potential impact for employers is that the cost of insurance plans for their employees will likely increase because you will have to insure employees 65 and older. Actuarial data shows that people 65+ are more expensive to insure than younger employees.
Should you wish additional information on this topic, please contact your benefits consultant at 1-800-661-1518 or fill out the contact form below.