Lessons in Managing an Aging Workforce: Terminations

age and gender discriminationIt has been only a few weeks since Lisa LaFlamme, CTV National News’ former chief anchor and senior editor,  shared on Twitter that Bell Media terminated her contract after over 30 years with the company. Her termination has since made international news due to allegations of age and gender discrimination. The company’s Vice President has announced a leave of absence and other employees have publicly raised concerns about a toxic work environment. 

Age discrimination is likely to become a more common allegation against employers given the general demographics of our workforce. The proportion of working-age people in Canada who are between the ages of 55 and 64 is at an all-time high of 21.8%.  

What is Age Discrimination?

Under the Ontario Human Rights Code, all employees over the age of 18 are protected from age discrimination in employment, with a few limited exceptions for those over age 65. This means employees under 18 are not protected by human rights age discrimination laws. Age discrimination occurs when an employee experiences differential treatment by their employer that imposes a burden on or withholds a benefit from them, and where age is a factor in that differential treatment. 

If an employee can demonstrate age discrimination has occurred by meeting this test, then the burden shifts to the employer to demonstrate that its actions were reasonable and bona fide in the circumstances. In making its case, the employer must demonstrate they have accommodated the employee to the point of undue hardship.

An employee is likely to have a claim even if their termination/forced retirement is only tainted by discrimination. In other words, it need not be expressly the reason, making this a very nuanced area of human rights law.

Termination Risks

Terminating employees who are close to retirement age can come with a significant price tag for a few reasons. First, when an employee has a long tenure with the employer and holds a senior position with a high salary, a Court may view the termination as a forced retirement, increasing the reasonable notice period to their likely date of retirement. 

Second, one of the key factors a Court considers to determine reasonable notice at common law is age, recognizing that finding re-employment at age 60 can be much more difficult than at age 30. A higher age favours a longer notice period.

Finally, if an employee successfully claims age was a factor in their termination, the employer will also be on the hook for damages, which can be significant, not to mention the potential for disruption in the workplace and bad public relations.

Graceful Exits

Graceful exits for employees close to retirement are possible. 

Mandatory retirement policies are no longer legal in Canada, with very limited exceptions where an employer can demonstrate age is a bona fide requirement of a job (which has been found to be the case for police officers or firefighters). 

While mandatory retirement policies are no longer legal, employers may offer retirement incentives and even early retirement incentives, as long as it is truly voluntary for employees. In the absence of a policy, an employer who wishes to terminate an employee may offer the option of early retirement first (as long as the decision to terminate is not discriminatory), though this will need to be executed carefully. 

At the end of the day, our legal system recognizes that the end of a career is a significant milestone for an individual and seeks to protect an employee’s dignity in the choice to retire. Employers must proceed with extra caution in making termination decisions for employees nearing retirement age.

If you require legal counsel about retirement incentives, human rights obligations or terminations, get in touch

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