An Update On Mandatory Retirement

Although blanket rules allowing mandatory retirement have been removed from human rights legislation for some time, there continue to be mandatory retirement cases. The recent Nova Scotia decision in CSAP v. CUPE, Local 2272, summarized on our blog, is the most recent case from Atlantic Canada.

Background – human rights legislation and mandatory retirement

Like other human rights legislation, Nova Scotia's Human Rights Act (the "Act") prohibits age-based discrimination in the workplace. As mandatory retirement treats employees differently based on their age, it is discriminatory. Until July 2009, there was an exception in the Nova Scotia Act for a "bona fide plan, scheme or practice of mandatory retirement" (Section 6(h)), but that Section of the Act was repealed at a time when other provinces made comparable changes to "eliminate" mandatory retirement.

The news of the total elimination of mandatory retirement was greatly exaggerated since other exceptions remained. First, employers can apply mandatory retirement (and have) if it is a bona fide occupational requirement. Second, there is another exception that may allow employers to continue the practice of mandatory retirement for the "operation of a bona fide retirement or pension plan or the terms or conditions of a bona fide group or employee insurance plan" (Section 6(g)). Section 6(g) allows a mandatory retirement policy if it is connected to "the operation" of a pension plan scheme. But, what sort of connection is required to invoke Section 6(g)? The answer to this question is relevant to Atlantic Canadian employers across the region as legislation in all four provinces have rules that are similar to Nova Scotia's Act.

Meanwhile, the federal human rights statute – the Canadian Human Rights Act – also had a provision similar to the now repealed Section 6(h) in the Nova Scotia Act. However, it has been challenged as being unconstitutional under the provisions of the Charter of Rights and Freedoms and, as part of the implementation of the 2011 budget, will be repealed on December 15, 2012.

What courts and tribunals have said

In 2008, the Supreme Court of Canada decided in New Brunswick (Human Rights Commission) v. Potash Corporation of Saskatchewan Inc. ("Potash") to allow a mandatory retirement policy based on provisions of the employer's pension plan. The New Brunswick Human Rights Act has a unique provision that allows termination of employment "because of the terms of any bona fide...