- Our Firm
- CCP Team
- CCP Resources
- CCP Careers
Recent economic difficulties and an overall corporate focus on “leaner” structures have Human Resources professionals looking more than ever to trim payroll and downsize workforces. Given the aging Canadian workforce, the question of offering early retirement often comes up in our discussions with clients: can we offer early retirement, and if so how do we do it?
While an employer is certainly free to “package people out” through early retirement, a recent decision of the Human Rights Tribunal of Ontario offers a cautionary tale with respect to the potential liability an employer can incur if retirement situations are not handled appropriately. Since the elimination of mandatory retirement in 2006, the concept of “early retirement” has greatly expanded – with no more mandatory retirement age, any retirement before an employee decides of their own volition to walk away becomes an “early retirement”. In conjunction with that, Ontario’s Human Rights Code prohibits discrimination on the basis of age; accordingly, retirement, at least from an employer’s perspective, has become a very sensitive issue.
Fortunately, in addition to admonishing the employer for the way this particular matter was handled, Vice-Chair Brian Cook’s decision in Deane v. Ontario Community Safety and Correctional Services (and its subsequent decision on remedy) also provides some guidance for employers dealing with employees approaching the end of their working career.
In this case, Ms. Deane was nearing the date at which, due to a combination of her length of service and her age, she could retire with a full pension from the Ontario Public Service. An employee since 1989, and approaching age 60, Ms. Deane had held various secondment positions throughout the public service since leaving her “home position” with the office of the Ontario Public Guardian and Trustee in 2000. However, she had not yet decided whether to avail herself of this opportunity when her then-boss began encouraging her to retire: he made several comments, called friends of his who had retired in the presence of Ms. Deane to “provide her with information” and appeared to discourage Ms. Deane from applying for a permanent position in his department. Ms. Deane ultimately felt forced to retire and claimed she had done so under duress from a poisoned work environment. In her application to the Tribunal she cited a belief that she had been discriminated against on the basis of age because management decisions affecting her (including not being successful for the permanent posting and in not having her secondment extended) were premised on the assumption that she was going to retire.
The Tribunal found that Ms. Deane’s boss had indeed treated her differently in her employment on the basis of age. Vice-Chair Cook said that, although it was not necessarily discriminatory to treat an employee differently once he or she had announced a retirement date, treating the employee differently simply because they were close to “retirement age” can result in age discrimination:
“Treating an employee as if the employee is going to retire imminently when the employee is not going to retire imminently can infringe a person’s Code-protected rights because the basis for the treatment is the employee’s age.
Similarly, encouraging an older employee to take advantage of retirement options might result in discrimination because the message could be that the older employee is no longer valued as an employee. Of course merely providing information about retirement options is not discriminatory, especially if the information is provided at the request of the employee.”
Ultimately the Tribunal did not find that the discrimination was such that it caused her to lose the job competition, or to justify reinstatement, but that it did entitle her to damages for injury to dignity, feelings and self-respect.
The lesson for employers is to be cautious in broaching the subject of retirement with older employees. Certainly, as the above passage from the decision indicates, where an employee has announced an intention or requested information, the employer is on solid ground. However, if you are contemplating offering early retirement to any employee, or looking for other creative ways to downsize without facing costly litigation, speaking with a CCP lawyer before you speak with any employees will help you avoid the pitfalls that land employers, such as Ms. Deane’s, in hot water.
Please Note: This blog has been prepared as an informational service for our clients and other interested parties. It is not intended to constitute legal advice, a complete statement of the law or opinion on any subject. Although we endeavour to ensure the accuracy of the content, no one should act upon the information provided without a thorough examination of the law after the facts of a specific situation are fully considered.
To be notified of future articles, follow us and Subscribe to our RSS feed!
- CCP News and Events (6)
- Construction Labour Relations (1)
- Employment Litigation (54)
- Employment Standards (13)
- Human Resources Support Services (48)
- Human Rights (25)
- Labour Relations (21)
- Occupational Health and Safety (25)
- Pay Equity (1)
- Privacy (7)
- Uncategorized (1)
- Workplace Safety and Insurance (13)
- Wrongful Dismissal (27)