AGE DISCRIMINATION CLAIMS: THE PERSPECTIVE IN 2015 Katherine Pollock, Partner Alix Herber, Partner Marc Rodrigue, Associate Overview Applicable Legislation Early Retirement Packages and Mandatory Retirement Age and Job Applications Performance Management Duty to Accommodate, Medical Absences and Frustration Benefits Age and Notice at Termination Considerations (Fasken Martineau Institute) 1
Human Rights Code of Ontario Right to equal treatment: 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 10. (1) age means an age that is 18 years or more Employment Standards Act, 2000 O. Reg. 286/01: Benefit Plans regulates employmentrelated disability, medical, dental, drug, life insurance and pension plans 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 Institute) 2
Canadian Human Rights Act Prohibited grounds of discrimination 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. The End of Mandatory Retirement Mandatory retirement programs are no longer permissible under provincial or federal human rights legislation Employers may still Offer voluntary retirement programs Be able to justify a mandatory retirement program as a bona fide occupational requirement ( BFOR ) (Fasken Martineau Institute) 3
Early Retirement Packages Offered as an incentive to promote voluntary exit from the workforce When done properly they are not discriminatory However, early retirement schemes often target older workers, and employers must take care as it may raise human rights concerns Voluntary Retirement Packages and Discrimination Claims Deane v Ontario (Ministry of Community Safety and Correctional Services), 2011 HRTO 1863 Public service employee since 1989; worked in higher paying secondment position which got posted as permanent role; applicant was not successful in hiring process; she had the option to return to her home position, but chose retirement instead Discrimination found Employer comments encouraging employee to retire constituted differential and discriminatory treatment on the basis of age However, hiring process for the permanent position was not discriminatory; no evidence of direct discrimination in hiring process, and no evidence that successful candidates were less qualified Entitled to $7,000 compensation for injury to dignity and self-respect caused by the discriminatory comments [see Deane v Ontario, 2012 HRTO 1753] (Fasken Martineau Institute) 4
Voluntary Retirement Packages and Discrimination Claims Watson v Canadian Auto Workers Local 27, 2011 HRTO 446 Applicant felt discriminated against because she was offered an early retirement package when her coworkers were not No discrimination Employer may offer early retirement incentives She was made the offer because she was eligible for early retirement under the employer benefit plan, while other employees were not There was no evidence of direct or implicit pressure Voluntary Retirement Packages and Discrimination Claims Do not directly or implicitly pressure employees to accept retirement A generous retirement package does not defeat a claim of age discrimination if early retirement option was not truly voluntary Ensure that retirement package is not coercive Define the eligibility criteria for the retirement program and share with all staff regardless of age Do not make any link between the acceptance of a retirement package and job loss (Fasken Martineau Institute) 5
Mandatory Retirement as a Bona Fide Occupational Requirement (BFOR) To justify a mandatory retirement program, employers would have to meet the BFOR test: 1. That the program was developed in good faith; 2. That it was rationally connected to the nature of the work; and 3. That it would be impossible to develop a non-discriminatory program without undue hardship Mandatory Retirement as a Bona Fide Occupational Requirement (BFOR) Espey v London (City), 2008 HRTO 412 Whether mandatory retirement provision in collective agreement for firefighters at age 60 was a BFOR; Parties agreed that if provision valid, employee would be dismissed; no argument on an individual exception Mandatory retirement was a BFOR Employer could not implement individual testing without undue hardship (mainly consisting of safety risks) On evidence, there was no individual testing method that would allow a better risk assessment of on-the-job events for firefighters more accurately than age However, tribunal suggested accommodation may be required where individual firefighter requests exception from the provision and provides medical evidence of low cardiac risk (Fasken Martineau Institute) 6
Mandatory Retirement as a Bona Fide Occupational Requirement (BFOR) Baker v Cambridge (City), 2011 HRTO 1167 Firefighter requested individual exception from mandatory retirement policy (i.e. the undecided issue is Espey) Employer adopted policy allowing employee to work past mandatory retirement date if he passed a fitness test No discrimination Policy adopted by employer was a BFOR Mandatory Retirement as a Bona Fide Occupational Requirement (BFOR) Corrigan v Mississauga, 2013 HRTO 1313 Group of firefighters requested individual exceptions from mandatory retirement policy and wanted the employer to work with them in developing a testing regime No discrimination To request an individual exemption, a firefighter over 60 must at the very least present evidence to the employer that he or she is at a low or negligible risk for cardiac arrests The firefighter in this case did not do so (Fasken Martineau Institute) 7
Age and Job Applicants May know or be aware of internal candidates age External applicants resumes may explicitly, or implicitly, indicate age Age should not factor into decision-making Don t make assumptions on a resume, ask consistent questions at interview Be clear on messaging to candidates (includes all personnel who are involved in the hiring process): Reiss v CCH Canadian Limited, 2013 HRTO 764 Performance Management: General Principles With end to mandatory retirement, employers can no longer wait out a bad employee Managing performance: Objective and fair expectations and standards of work Standards communicated to employee Employer provides suitable instruction and training Employee consistently incapable of meeting standards Employee warned that failure to meet performance standards would result in further discipline, then eventually dismissal Employees should not say: I didn t see that coming Don t be wilfully blind to performance issues caused by a disability (Fasken Martineau Institute) 8
Performance Management and Progressive Discipline Performance Management communications should: Be in writing Clearly set out the performance concern or problem, Provide expectations to the employee, What steps the Company will take to help the employee meet those standards The consequences of failure to consistently improve Performance Management and Progressive Discipline Riddell v IBM Canada, 2009 HRTO 1454 Employee with 33 years of service with IBM; Argued discrimination on basis of age due to repeated retirement offers, increased work performance scrutiny (PIPs) and alleged harassing comments by managers No discrimination Employer entitled to provide voluntary early retirement packages, manage poor performance of older employees (Fasken Martineau Institute) 9
Performance Management and Progressive Discipline What are the lessons for Employers? Act early: allowing a performance issue to become habit may suggest the employer is condoning it Keep a written record of meetings, training sessions, familiarization periods, warnings, performance reviews Ensure consistent process is used When in doubt, ask for help The Duty to Accommodate: General Principles Duty to accommodate requires designing a workplace that is inclusive of older workers Test accommodation to point of undue hardship Past cases, in other contexts, highlight that employers may want to: Modify work (i.e. sitting, standing, bending) Modify hours of work, schedules, etc. Move unionized employees to new bargaining unit Move unionized employees outside bargaining unit Move employee to role with other accommodated employees Create short-term productive projects (Fasken Martineau Institute) 10
Duty to Accommodate Disabilities Employers have a duty to accommodate employees with disabilities Age itself is not a disability Employers are entitled to sufficient information about that disability and the limitation the disability imposes on the employee in order to make an assessment Employees seeking accommodation have a duty to actively participate in the process Medical Absences and Frustration 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 Institute) 11
Frustration: Recent Cases 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: Recent Cases 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 Institute) 12
Frustration: Recent Cases 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 Benefits No requirement to maintain benefits past age of 65 in Ontario May wish to provide notice to employees that benefits will terminate at 65 or older May wish to discuss options with benefits carrier (Fasken Martineau Institute) 13
Benefits: Recent Cases 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 Benefits: Recent Cases Gouthro v Workplace Safety and Insurance Appeals Tribunal et al, 2014 ONSC 7289 S. 43(1) of the Workplace Safety and Insurance Act cuts off loss of earnings benefits when employee reaches 65 No discrimination Did not violate the Canadian Charter of Rights and Freedoms Did not create disadvantage based on stereotypical attribute; rather, grounded in statistically verifiable facts related to retirement Loss of earnings benefits should not continue forever; would imply that people work until they die Loss of earnings benefits should be replaced by retirement income benefits at age reflecting typical retirement (Fasken Martineau Institute) 14
Benefits: Recent Cases 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 Possible Section 15 Charter Claim against O. Reg. 286/01 (Benefits)? 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 39960 and 2015 CanLII 15359 (Surdykowski) Similar arguments Dismissed as an abuse of process (Fasken Martineau Institute) 15
Age and Notice of Termination Employment Standards Act, 2000 Age does not directly affect the amount of statutory termination and/or severance pay However, age has a direct impact on determination of common law reasonable notice (if applicable) One of the primary criteria considered in assessing reasonable notice is age of the terminated employee Cases reflect increased notice periods as older employees seen to have more difficulty finding new work This applies even to short service older employees Age and Notice of Termination: Recent Cases Yip-Young v L-3 Communications Electronic Systems Inc., 2011 ONSC 4537 56 year old Quality Assurance Specialist employed for over 24 years Employer provided 13.38 months as reasonable notice; judge held employee entitled to period of 20 months as reasonable notice Period of reasonable notice represented likely time period to find comparable employment Use of Summary Judgement Motion to fast track litigation (Fasken Martineau Institute) 16
Age and Notice of Termination: Recent Cases Brito v Canac Kitchen, 2012 ONCA 61 55 year old employee of 24 years; employee became unable to work following termination Trial judge awarded damages for lost employment income for 22 months No obligation to mitigate damages by finding alternate employment where the employee is totally incapable of working. Chen v Purdue Pharma Inc., 2015 ONSC 1967 56 year old Director of Business Development employed for 22 ½ years Taking into consideration the length of his service, importance of his role, and the limited availability of similar employment, judge held that 24 months constituted reasonable notice Including annual increases and bonus Age and Notice of Termination: Recent Cases Rodgers v CEVA, 2014 ONSC 6583 57 year old employee with limited education spent entire working life in the trucking and freight industry Canadian Country Manager at time of termination after 3 years service Employer argued that the 2 week short notice period (under 3 years) was appropriate because of short service time and provision in employment contract stating that notice based on his length of service and legal requirements Common law notice awarded: 14 months (Fasken Martineau Institute) 17
Termination of Employment - Recent Ontario Cases Case Position Service (in years) Age Notice (in months) Bernier v Nygard Intern. (2013) Manager 13 54 18 Walls v. Lewis (2009) Laverne v. Meloche Windows (2001) Ivey v. Oakrun Farm Bakery (2002) Portugal v. Car Park Management (2004) Senior Manager 9 61 12 Salesman 8 67 10 Route Salesman Parking Lot Attendant 3.5 55 5 11 59 12 Simpson v. Global Warranty Management Corp. (2014) O Sullivan v. Cavalier Tool & Manufacturing (2010) Claims Adjustor Shop Foreman 6.9 64 10 12.5 57 18 Obligation of Employee to Minimize Damages Following Termination Levy c. Standard Inc., 2013 QCCA 1473 75 year old employee with 38 years of continuous service; given 2 ½ months' notice of termination and offer to work for a company located further away than current company Employee refused offer due to effects of travel requirements at his age Not unreasonable for employee to reject offer Considerable travel distance would have added a great burden on employee s tasks Awarded 10.5 months pay Failure to mitigate losses did not affect entitlement to damages No causal link between employee s failure to make the required effort and the damages suffered; highly unlikely he would find employment due to age and skills (Fasken Martineau Institute) 18
SCENARIO 1 Justine has worked as an outside sales representative for 9 years for SalesRUS Inc. She is 67 years old and her performance has deteriorated over the past 18 months She is not calling customers back promptly, filing required orders and paperwork, has a snippy attitude with her manager SalesRUS Inc. decides to move Justine to an inside sales position where they can monitor her more closely WHAT ARE THE ISSUES? SCENARIO 1 cont. SalesRUS Inc. moves Justine to the inside sales position and Justine starts working in this role for 9 months Justine continues to have performance issues and a poor attitude with her manager Manager speaks with Justine regularly about her poor performance and attitude Justine doesn t seem to care After 9 months, SalesRUS Inc. terminates Justine for cause WHAT ARE THE ISSUES? (Fasken Martineau Institute) 19
Managing the Older Workforce: Key Takeaways 1. Be clear on hiring messages. 2. Voluntary retirement incentives are legitimate; pressuring an older employee to retire is not. 3. Clear and consistent progressive discipline programs may help mitigate complaints from dismissed poor performers. 4. Consider impact of any disability on performance. 5. When arguing frustration due to long medical absences, patience is key. The best practice is to obtain a precise medical prognosis that employee is incapable of work in the foreseeable future. 6. While employers are not required by law to offer benefits to employees over the age of 65, the termination of said benefits may trigger a complaint. 7. Consider employment contracts to set out defined termination entitlements to control increasing costs of terminating older employees (Fasken Martineau Institute) 20