Mandatory retirement at age 65 in question. (Law).

More than a decade ago, the Supreme Court of Canada ruled that policies requiring mandatory retirement at age 65 are constitutional and enforceable. Recently, however, the British Columbia Court Appeal has opened the door to a new challenge to mandatory retirement policies and has called on the Supreme Court of Canada to revisit its earlier decisions.

First, a bit of background. Section 16 of The Saskatchewan Human Rights Code prohibits an employer from discriminating with respect to employment because of age. "Age" is defined as "eighteen years or more, but less than sixty-five years." This means that under The Code a policy requiring a person who has reached age 65 to retire would not be illegal unless the policy was unconstitutional; i.e., unless it violated The Canadian Charter of Rights and Freedoms.

Over the years certain principles developed:

(1) A policy requiring mandatory retirement at age 65 is constitutional and can be enforced by the employer.

(2) To be enforceable, the mandatory retirement policy must become a term of the employment contract. The policy must be clearly communicated to the employee such that the employee accepts the policy.

(3) A mandatory retirement policy cannot be imposed on an employee unless the employee is given the reasonable notice of termination to which the employee would otherwise be entitled at common law.

(4) If the employee, for some reason, works beyond the agreed upon mandatory retirement date, the employer cannot automatically terminate the employee at any time just because the mandatory retirement age has been reached.

While Saskatchewan Courts are not required to follow the courts of another province, the implications of the October 5, 2001 B.C. Court of Appeal decision in Greater Vancouver Regional District Employees' Union v. Greater Vancouver Regional District could be far reaching.

The Coutts case involved the mandatory retirement of a waste plant operator, Ray Coutts, at age 65, pursuant to a 15-year-old unwritten policy. The union grieved the retirement and an arbitrator found in favor of Coutts on the basis that as a public body, the Charter applied directly to the employer. Therefore, the policy was discriminatory under Section 15 of the Charter which prohibits discrimination on the basis of age. Because the policy was discriminatory, the employer was required to justify it as a "reasonable limit prescribed by law..." under Section 1 of the Charter. The employer had not done so.

In a 2-1 decision, the Court held that mandatory retirement policies of public bodies violate Section 15 of the Charter and must be justified on a case-by-case basis. Employers cannot stand behind the provisions of human rights legislation. While on its face, the major implications of this decision are for the public sector, Justice Prowse ended her judgment with a plea to the Supreme Court of Canada to revisit the issue of mandatory retirement generally:

"...I would urge the Supreme Court of Canada to reconsider this issue... The demographics of the workplace have changed considerably...At least two other countries, Australia and New Zealand, have abolished mandatory retirement. Recent studies have been done on the effect of abolishing mandatory retirement in Canada and elsewhere...The extent to which mandatory retirement policies impact on other equality rights and on the mobility of the workforce, have become prominent social issues. The social and legislative facts now available may well cast doubt on the extent to which the courts should defer to legislative decisions made over a decade ago. The issue is certainly one of national importance."

For the time being, employers in Saskatchewan can continue to apply policies requiring mandatory retirement at age 65 as they have in the past, subject to the principles set out above. Employers would be prudent, however, to consider what reasonable justification may exist for such a policy in their particular workplace, as it may not be long before there is new word from the Supreme Court of Canada on this issue.

Anne is a lawyer in Saskatoon with Wallace Clackson Meschishnick Zawada.