Navigating an Aging Workforce

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1 Navigating an Aging Workforce Agenda 1. Facts and Figures: Canada s Aging Workforce 2. Traits and Benefits of Mature Workers 3. The Elimination of Mandatory Retirement and Bona Fide Occupational Requirements 4. Disability Management and the Accommodation of Mature Workers 5. Best Practices for Navigating the Aging Workforce 1. Recruitment 2. Performance Management 3. Progressive Discipline 4. Benefits 5. Knowledge Transfer 6. Terminations 7. Retirement Strategies 2 Facts and Figures: Canada s Aging Workforce Between 1926 and 2005, males have gained an additional 20 years of life expectancy and females have gained an additional 22.7 years of life expectancy and the numbers continue to rise By the year 2031, projections estimate that the life expectancy of Canadian males and females will reach 81.9 and 86.0 respectively 42.4% of the working population are between the ages of 45 to 64, a record high proportion 3 1

2 Facts and Figures: Canada s Aging Workforce (cont d) How will the aging population impact the workplace? Reduced-size workforce due to the baby boom Fewer employees entering Those that enter, do so later Older employees retiring Experience and knowledge will be difficult to replace Leadership positions may suffer the greatest shortfalls Canadian Chamber of Commerce predicts a labour shortage of nearly one million people by Traits and Benefits of Mature Workers Mature Worker Traits: Hard and dedicated workers Loyal to employers Goal-oriented, confident Want respect Dislike micro-management Crucial skills can increase with age rather than decrease* Communication Running meetings Early problem spotting Valuable experience Transfer knowledge and skill to younger workers * Employing Older Workers, Dept. for Work and Pensions (United Kingdom) 5 The Elimination of Mandatory Retirement and Bona Fide Occupational Requirements Every provincial jurisdiction in Canada, except New Brunswick, has eliminated mandatory retirement as well as federally Forcing someone to retire at age 65 (or sooner) constitutes a human rights violation on the basis of age Mandatory retirement at age 65 (or sooner) is only permitted where it is a bona fide occupational requirement ( BFOR ) 6 2

3 The Elimination of Mandatory Retirement and Bona Fide Occupational Requirement (cont d) Establishing mandatory retirement as a BFOR: 1. The general purpose of the requirement has to have a rational connection to the performance of the job 2. The measure has to have been adopted in a good faith belief that it was necessary to the fulfillment of that legitimate work-related purpose 3. The standard must be reasonably necessary to the accomplishment of that work related purpose The final part of the test requires the employer to show that individual accommodation is not possible, which includes demonstrating that no reliable method of evaluation has been created or that it would constitute undue hardship to conduct such an assessment Age limits have been accepted as BFOR s for police officers, firefighters, and school bus drivers 7 Case Law Vilven v. Air Canada (CHRT, 2010) CHRT declared the age 60 retirement provisions in Air Canada s pension plan and its collective agreement violated the Charter CHRT ordered that it cease applying the offending provisions to the two pilots who complained not all pilots The pilots were reinstated with compensation for wage loss (but only for the time between the initial decision and the reinstatement date), credited for their lost seniority and reinstated into the pension plan retroactively to when they were forced to retire CHRT denied an award for pain and suffering, which the pilots sought in the amount of $20,000 each The Supreme Court of Canada dismissed the appeal of this case in March Case Law (cont d) Bastide v. Canada Post Corp. (FC, 2005) Temporary employees required to undergo manual dexterity tests to obtain permanent position Applicants who failed the tests and refused permanent employment argued discrimination on the basis of age Although the test was prima facie discriminatory, employer-established test was a BFOR Legitimate to assess aptitude before investing in employee training Tests did not advantage any age category by its design or makeup Individual assessment was a form of accommodation and testing was a reliable and relevant measure of qualifications required to perform the work in question Close correlation between test results and rate of success achieved during subsequent training Without the tests, employer was unable to avoid undue hardship (i.e. unable to organize its staffing in due time and a considerable amount of money 9 would be spent on training) 3

4 Disability Management and the Accommodation of Mature Workers An employer has a duty to accommodate an employee that suffers from a disability up to the point of undue hardship Disability is defined very broadly in human rights legislation and, in most cases, will include traditional age-based medical conditions such as high blood pressure and diabetes Accommodation must be considered on an individual basis and will not be the same for all employees in every situation Accommodation is a multi-party inquiry there is a duty placed on the employer, the employee, and the union where the employee is subject to a collective agreement Accommodation can include many different forms of assistance such as time away from work, modified work hours, special training or tools, and modified work spaces 10 Disability Management and the Accommodation of An employer s duty to accommodate is typically invoked in the following circumstances: When the mature worker raises the need for accommodation (i.e. once sufficient medical information is obtained by the employer from the mature worker s physician); or When the need for accommodation becomes evident to the employer 11 Disability Management and the Accommodation of Medical Information An employer is entitled to and is encouraged to obtain information from the mature worker s treating physician The information the employer is entitled to obtain is limited to the mature worker s limitations and anticipated return to work date An employer is not entitled to information regarding the mature worker s diagnosis 12 4

5 Disability Management and the Accommodation of Employer Obligations An employer is required to: Seek out information when odd behaviour is present Accommodate a mature worker up to the point of undue hardship Accommodate a mature worker once he/she returns to work with medical clearance Consider whether there are existing jobs that can be modified to facilitate the mature worker s ability to continue working 13 Disability Management and the Accommodation of An employer is not required to: Create a non-productive position by bundling non-existent duties Assign the mature worker non-productive tasks Yield to a non-cooperative mature worker that refuses to participate in his/her own accommodation An employer may be required to: Bundle various duties to create a productive position within the business that accommodates the mature worker s disability 14 Disability Management and the Accommodation of Undue Hardship Undue hardship is the point at which the employer s obligation to accommodate an employee s disability ceases Numerous factors will be considered in the evaluation of undue hardship: Financial costs Size and resources of the employer Disruption of operations/collective agreement Morale problems of other employees brought about by accommodation Substantial interference with rights of other individuals or groups Interchangeability of work force and facilities Health and safety concerns The size of an employer s operation may influence the assessment of whether a given financial cost is undue 15 5

6 Best Practices for Navigating the Aging Workforce 1. Recruitment 2. Performance Management 3. Progressive Discipline 4. Benefits 5. Knowledge Transfer 6. Terminations/Layoffs 7. Retirement Strategies Recruitment Age discrimination at the time of hiring Eliminate anything in the recruitment and selection process that may favour younger workers Amend application forms so an applicant is not required to disclose their age Avoid questions during interviewing that relate to age Pre-employment medical testing, where a BFOR exists and permissible (limited application), only after a conditional offer of employment has been made Avoid assumptions and stereotypes relating to ability References to age should not be made at any time Performance Management Performance issues should be documented and addressed Ideally, carry out formal performance reviews for all workers If you have not done performance management in the past, do it for all workers or not at all Train managers on how to manage performance for all workers Offer retraining where possible and practical Measure performance against accurate job descriptions and key duties Manage attendance and disability matters promptly Should not be based upon assumptions Performance management should be documented! 18 6

7 3. Progressive Discipline Where available, progressive discipline programs should be followed Apply progressive discipline to all workers Do not allow older workers to slip through the cracks Clear expectations for improvement should be set out in any documentation Consider whether the issue warrants discipline or accommodation Document progressive discipline issues Benefits Needs of the mature worker may differ from the younger employees Health needs, care giving needs, related changes may be sudden Offering benefits that address wide range of support or alternatively allow for flexibility may be best Attractive benefits may motivate older workers to remain longer Knowledge Transfer It is critical to ensure that the knowledge and expertise does not leave with these employees Consider: Mentoring Coaching Job shadowing Consultation 21 7

8 6. Termination Must be wholly unrelated to age Reduced performance rarely amounts to just cause Employment agreements limiting notice obligations Without a valid termination provision, be prepared to provide reasonable notice at common law, which can be greater on account of age Document, document, document performance issues prior to termination In a unionized workplace, consult the collective agreement prior to termination 22 Case Law Price v. Top Line Roofing Ltd. (B.C., 2013) Two of the Company s oldest journeymen (aged 60 and 53) were laid off in July 2012; several months before the layoff, the employer hired a young journeyman in his 40s and two young journeymen apprentices The Company claimed that the 53 year-old complainant s layoff was done on the basis of shortage of work, lack of speed and poor motivation and attitude; performance issues were never raised with the complainant The Company had no documentation that supported its allegations; Tribunal inferred that age was a factor in the complainant s layoff There is no doubt that age, as in aging and the lack of capacity to perform work, can be inextricably linked. An employer cannot terminate employment based on stereotypical assumptions about age, but there may be circumstances when the reasons for termination are related to declining performance. If job performance is the issue, an employer must [provide] notice of the job performance problems and an opportunity to meet the workplace standard. Remedy: Two months of wage loss NB: The complainant did not request more than two months of wages and specifically did not seek an award for injury to dignity Retirement Strategies General Considerations Use formal and informal performance discussions to talk about on-going work and retirement options, along with skill development Create an atmosphere where employees are encouraged to initiate discussions with their manager about continuing to work or retiring Communicate with employees about their ability to work longer but not expected to work indefinitely Consider Early Retirement Packages Option available to all employees Must be non-discriminatory Offer some combination of retirement allowance, pension supplements or additional service time to activate full pension entitlement Offer continued medical benefit coverage if available Retirement counseling 24 8

9 7. Retirement Strategies (cont d) Bona Fide Occupational Requirement Impose mandatory retirement due to a BFOR High standard Offer Flexible Work Arrangement Reduction in hours and/or duties with employee s agreement Agree on a transition plan out of the Company Consultant role or project based work Voluntary Retirement Some employees will want to retire at normal retirement age even if one is not set 25 Conclusion Mature workforces are a reality in Canada Mature workers are valuable if managed properly Beware of human rights issues around older workers to avoid allegations of ageism Talk to your employees about retirement and consider putting a plan in place Call us with any questions! 26 Thank You. e2r Solutions 70 The Esplanade, Suite 401 Toronto, ON Canada M5E 1R2 toll free tel fax e2r Solutions is a service of Woolgar VanWiechen Ketcheson Ducoffe LLP, a certified MDP. Copyright WVKD, LLP 9

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