Litigation Claims related to the Aging Workforce
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1 Litigation Claims related to the Aging Workforce Karen Sargeant, Partner Marc Rodrigue, Associate Eowynne Noble, Associate May 17, 2016 Litigation Claims related to the Aging Workforce Introduction The End of Mandatory Retirement Age Discrimination Claims Disability Discrimination Claims Frustration of Employment Cessation of Benefits past 65 Wrongful Dismissal Claims Tips to being Successful at Litigation Fasken Martineau LEHR 1
2 Introduction 2015 population milestone 5.78 m Canadians m Canadians < 15 More employees working past 65 32% expect to be working full-time at 66 27% expect to be working part-time at 66 Means more challenges for employers The result? More litigation Impact on Employers and Employees Older workers here to stay Productivity and Management Job loss and reemployment statistics Not as dire as we are led to believe? Tools for re-employment the real divide? Fasken Martineau LEHR 2
3 The End of Mandatory Retirement Ontario Human Rights Code Age Discrimination Mandatory retirement legislation constitutional Ontario had general mandatory retirement available up to 2006 Other provincial examples Age Discrimination Claims Definition of age in human rights legislation Ontario Human Rights Code, RSO 1990, c 19 Canadian Human Rights Act, RSC1985, c H6 What the age discrimination case law tells us Physical vs mental jobs BFOR Litigating age discrimination claims Tribunals Arbitrations Court Proceedings Fasken Martineau LEHR 3
4 Definition of Age Human Rights Legislation Human Rights Code of Ontario (post -2006) S. 5 (1) Every person has a right to equal treatment with respect to employment without discrimination because of race, ancestry, place of origin, colour, ethnic origin, citizenship, creed, sex, sexual orientation, gender identity, gender expression, age, record of offences, marital status, family status, or disability S. 10 (1) age means an age that is 18 years or more... Canadian Human Rights Act (pre- 2011) 15 (c) is not a discriminatory practice if an individual's employment is terminated because that individual has reached the normal age of retirement for employees working in positions similar to the position of that individual. Fasken Martineau LEHR 4
5 Canadian Human Rights Act (post- 2011) s. 3 (1) For all purposes of this Act, the prohibited grounds of discrimination are race, national or ethnic origin, colour, religion, age, sex, sexual orientation, marital status, family status, disability and conviction for an offence for which a pardon has been granted or in respect of which a record suspension has been ordered 15 (1) It is not a discriminatory practice if: (a) any refusal, exclusion, expulsion, suspension, limitation, specification or preference in relation to any employment is established by an employer to be based on a bona fide occupational requirement; (b) employment of an individual is refused or terminated because that individual has not reached the minimum age, or has reached the maximum age, that applies to that employment by law or under regulations, which may be made by the Governor in Council for the purposes of this paragraph Exceptions - New Brunswick and Newfoundland Prohibitions against discrimination on the basis of age do not apply when a bona fide retirement, pension plan, or group or employee insurance plan are in place [s 4(6) RSNB 2011, c171 and s 14(6) SNL 2020, c H-13.1] Fasken Martineau LEHR 5
6 What the case law tells us Epsey v London (City), 2008 HRTO 412 Whether a mandatory retirement provision in a collective agreement for firefighters was a bona fide occupational requirement (BFOR) The Tribunal found that mandatory retirement at age 60 for firefighters was a BFOR because: Cardiac risk increased with age The City could not implement individual testing without undue hardship There was no individual testing method that would allow better risk assessment of on-the-job events for firefighters more accurately than age Accommodation may be required where individual firefighter could provide medical evidence that he or she was of low cardiac risk Epsey Cont d The adjudicator in this case held that for an employer to successfully show that age is a BFOR it must show that: The program was developed in good faith; That it was rationally connected to the nature of the work; and That it was impossible to develop a non-discriminatory program without undue hardship Fasken Martineau LEHR 6
7 Riddell v IBM Canada, 2009 HRTO 1454 Employee with 33 years of service with IBM Argued discrimination on the basis of age due to repeated retirement offers, increased work performance scrutiny and alleged harassing comments by manager No discrimination Employer entitled to provide voluntary retirement packages, manage poor performance of older employees Adamson v. Canada (Human Rights Commission), 2015 FCA 153 Mandatory retirement for Air Canada pilots at age 60 has been a company policy and part of their pension plan since 1957 Decided under previous CHRA which permitted mandatory retirement if the statistical evidence showed that the group normally retired at the prescribed age (s. 15 (1) (c)) Tribunal dismissed Adamson et al complaints (70 in total). Discrimination not made out. Statistical determination that the normal age of retirement for pilots like Adamson et al was age 60 Federal Court overturned Federal Court of Appeal upheld Tribunal s decision NOW: unclear whether wages, pensions career path expectations could form the basis of a bona fide occupational requirement defence Yet to see what will occur under the new CHRA Fasken Martineau LEHR 7
8 Assn. of Justices of the Peace of Ontario v. Ontario (Attorney General), OR (3d) 16 A charter challenge by a group of former Justices of the Peace (JPs) who wished to continue working past 70 years old The Justice of the Peace Act mandated retirement at the age of 70 Ontario Superior Court held: Parties agreed to a form of mandatory retirement necessary for security of tenure Comparator group was JPs under the age of 70 AG failed to show that means chosen minimally impaired the JPs right to equality (no reason for selecting 70) Read in the retirement provision, JPs permitted to work till 75 Assn. of Justices of the Peace of Ontario v. AG cont d There is clearly a stereotypical application of preconceptions about age that, without regard to their individual capabilities and needs, justices of the peace over 70 no longer have the mental acuity or the physical stamina to engage in their challenging work. The consequences of the legislation are severe -- the interference with their right to work, a right fundamental to their dignity. [para 125] Fasken Martineau LEHR 8
9 Mlotek v York-Med Systems, 2015 ONSC year old woman (Moltek) was terminated Had been scheduling coordinator at York-Med for 16 years Sought damages for: wrongful dismissal $75,000; and $20,000 for discrimination based on age Moltek alleged that a younger worker was hired to do her job however she could not prove this in court York-Med was going through financial difficulty argued termination unrelated to age Justice Wright : [her age] alone does tend to give one pause, however, I am not of the view that it makes out a prima facie case for discrimination based on age Litigating Age Discrimination Claims HRTO/CHRT Application Response Mediation/ Summary and Preliminary Hearings Hearing Defenses BFOR and/or undue hardship Remedies Monetary damages and reinstatement Fasken Martineau LEHR 9
10 Court and Arbitral Proceedings Unionized context Grievance for discrimination based on age Preliminary arguments Remedies - lost income and reinstatement Court Violation of human rights legislation added to wrongful dismissal claim Cannot be brought on its own Separate head of damages Remedies - monetary damages, but no reinstatement Disability Discrimination Claims Disability and productivity 1/3 Canadian s over the age of 65 have a mental illness Duty to Accommodate Procedural Substantive Fasken Martineau LEHR 10
11 Examples of Accommodation Change in responsibilities/role Change in hours Physical workspace changes Leaves of absence Frustration of Contract Claims Medical leaves of absence: patience is key Disability will trigger an employer s duty to accommodate; however, some prolonged medical absences may lead to frustration of employment agreement The Supreme Court of Canada s test for frustration: Pattern employee absences; plus Evidence that employee is unable to attend work in the foreseeable future Fasken Martineau LEHR 11
12 Frustration of Contract Claims Naccarato v Costco Wholesale Canada Ltd, 2010 ONSC 2651 Employee was terminated for frustration; After 4 year absence due to depression, letter from doctor stated that he could not predict when Mr. Naccarato could return to work Costco argued that it was entitled to conclude, in the circumstances, that Mr. Naccarato would be unlikely to return to work in the foreseeable future Frustration not established Frustration of Contract Claims Duong v Linamar Corp (c.o.b. Eston Manufacturing), 2010 ONSC 3159 (aff d 2011 ONCA 38) Employee had not worked since 2005; terminated in 2009 Although prognosis in 2008 seemed optimistic, plaintiff did not provide updates when requested; absence continued and he was cut off long term disability Employee provided no evidence that he had any prospect in the foreseeable future of returning to work Frustration found Fasken Martineau LEHR 12
13 Frustration of Contract Claims Darvish-Ghaderi v Evertz Microsystems, 2013 HRTO 653 Employee was terminated for frustration; she argued employer s approach was discriminatory She alleged the employer harassed her with repeated clarifications from the doctor until it received what it needed a note stating she was unfit for work permanently No discrimination» No harassment; employer was entitled to clear and consistent medical reports; it was obligated to seek clarification of the applicant s limitations Cessation of Benefits past 65 An issue to watch O. Reg. 286/01: Benefit Plans regulates employment-related disability, medical, dental, drug, life insurance and pension plans The regulation defines age as any age of 18 years or more and less than 65 years This means that employers can differentiate benefit packages based on age (i.e. employers in Ontario are not required by law to provide benefits to workers over age 65) Fasken Martineau LEHR 13
14 Cessation of Benefits past 65 Talos v Grand Erie District School Board, 2013 HRTO 1949 Employee filed claim that differential treatment based on age was discriminatory Plain reading of Code does not prohibit discrimination with regards to benefit plans for employees over the age of 65 Kartna v Toronto (City), 2014 HRTO 395 Employee began receiving long term disability in April 2011 and upon reaching the age of 65 in September 2013 his long term disability was terminated Employee argued that termination of long term disability was forcing him into retirement and therefore discriminatory Termination of benefits found not discriminatory Cessation of Benefits past 65 For a claim of this nature to be successful the claimant must satisfy the section 15(1) common law test and it must not be justified under section 1 of the Charter of Rights and Freedoms Chatham-Kent (Municipality) and O.N.A., (2010) 202 L.A.C. (4th) 1 (Etherington) Alleged benefit cut-offs contravened the Human Rights Code, and alternatively, that the Human Rights Code benefits cut off contravened the Charter Dismissed, and not judicially reviewed University Health Network and O.N.A., 2013 CanLII and 2015 CanLII (Surdykowski) Similar arguments Dismissed as an abuse of process Fasken Martineau LEHR 14
15 Permitted under law, but under contract? Brockville Mental Health Centre v Ontario Public Service Employees Union, Local 439, 2016 CanLII 8802 (ON LA) Latest in series of union grievances using contract language to challenge cut off rather than Code If differentiation not contracted for (Collective Agreement), contract governs benefits might be owed over age 65 Benefits after Termination Fernandes v Peel Educational, 2014 ONSC 6506 Importance of ensuring accuracy of just cause allegations and potentially continuing LTD benefits during notice periods Employer terminated employee for what it believed to be just cause and subsequently terminated employee s LTD coverage Employee s conduct not considered to justify immediate termination» Employer ordered to pay LTD benefits until employee reached 65» Reasonable notice period determined to be 12 months» Employer found liable for the value of the disability benefits that would have been payable to employee through to age 65 Fasken Martineau LEHR 15
16 Wrongful Dismissal Claims Termination of older employees may come at higher cost Common law Bardal factors: Character of employment Length of service Age of employee Availability of similar employment Thornicroft Study 130 appellate court decisions reviewed 2000 to 2011 The result? Employees > 50 years old received an additional 3 months notice Regardless of length of service Courts prepared to award greater reasonable notice for those > 50 Fasken Martineau LEHR 16
17 Lowndes v. Summit Ford Sales General Manager 59 years old 28 years employment Judge 24 months reasonable notice Judge emphasized importance of age and years of service in assessing Bardal factors Yip-Young v. L-3 Comm ns Electronic Systems Inc. Quality Assurance Specialist 56 years old 24 years employment Employer months reasonable notice Judge - 20 months reasonable notice Judge accepted that harder to find employment because of younger employees in workforce Fasken Martineau LEHR 17
18 Chen v. Purdue Pharma Inc. Director of Business Development 56 years old 22 ½ years employment Judge 24 months reasonable notice Judge acknowledged difficulty of similar employment given employee s age Rodgers v. CEVA Canadian Country Manager 57 year old employee Limited education Entire working life in the trucking and freight industry 3 years of service Judge - 14 months reasonable notice Fasken Martineau LEHR 18
19 Keenan v. Canac Kitchens Lawrence Keenan 32 years as contractor 63 years old Marilyn Keenan 25 years as contractor 61 years old Judge and Court of Appeal 26 months each Bishop v. Carleton Co-Operative Ltd. Officer Manager 27 years of service 51 years of age NB CA 24 months reasonable notice Shocking suggested that older employees with long service have a reduced number of years left to retain and effectively compete in marketplace so fewer years left to offer new employer As such, employment potential is limited Moral claim to extended notice periods? Fasken Martineau LEHR 19
20 Impact of Age on Reasonable Notice The Irony of Increased Notice Periods Bardal factors developed in 1960 Before anti-discrimination laws Before Charter of Rights and Freedoms The irony: Bardal factors tells us to discriminate on the basis of age Legislation tells us not to Some argument to disregard age when assessing reasonable notice periods Fasken Martineau LEHR 20
21 The Irony of Increased Notice Periods It does not take older workers longer to find alternate employment 33% of men and 27% of women 50+ re-employed within same year as ending long term job 60% of men and 51% of women 50+ re-employed within year following year ending long term job Has the pendulum swung too far? Tips to being Successful at Litigation Performance management Can no longer wait out a bad employee Act early do not condone bad habits Keep written record Ensure consistency Document to ensure age not factor in decisionmaking Consider termination clauses to take age out of the termination entitlement equation Fasken Martineau LEHR 21
22 Tips to being Successful at Litigation Consider benefits clauses to ensure can discontinue benefits Consider voluntary retirement packages Voluntary retirement packages are legitimate Pressuring an employee to retire is not Consider outplacement services to maximize ability for employees to find alternate employment Karen M. Sargeant Partner ksargeant@fasken.com Marc Rodrigue Associate mrodrigue@fasken.com Eowynne Noble Associate enoble@fasken.com Fasken Martineau LEHR 22
23 Fasken Martineau LEHR 23
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