The Government of Canada has recently confirmed repeal of the legislative provisions which have allowed for mandatory retirement of employees governed by federal employment and human rights legislation. As a result of the Royal Assent of Bill C-13, the law governing federally regulated private sector employers now matches the provisions in other Canadian provinces, including B.C., Alberta and Ontario, which have already outlawed mandatory retirement.
The provisions of Bill C-13 which amend the relevant provisions of the Canadian Human Rights Act, will not take effect until December 2012, which allows employers a period of transition. The elimination of mandatory retirement will mean that federally regulated employers will not be able to terminate employment because of age unless the employer is able to establish a bona fide occupational requirement. It is anticipated that it will be difficult, from a practical perspective, for employers to meet this legal test.
In those jurisdictions where mandatory retirement has already been abolished, there has not yet been the predicted raft of complaints from employees claiming they have been forced to retire contrary to the abolishment of mandatory retirement. However the extent to which this may change as the requirement for employers to "manage out" older workers who are not performing becomes more pronounced as the work force ages, remains to be seen.
The end of mandatory retirement has clearly led to employers taking a more proactive and aggressive approach to employee performance management since they will in many cases no longer be able to rely on a retirement rule or policy. This reality, which already affects most other employers in Canada, now also faces federally regulated employers as a result of the Royal Assent of Bill C-13.
The foregoing provides only an overview. Readers are cautioned against making any decisions based on this material alone. Rather, a qualified lawyer should be consulted.
© Copyright 2012 McMillan LLP