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Canadian Human Rights Tribunal decision may signal death knell for mandatory retirement in federal sector

On July 1, 2009, Nova Scotia amended its human rights legislation in order to prohibit mandatory retirement in most cases.  This means that every province and territory in Canada has now either prohibited mandatory retirement outright, or only allows it if it is based on bona fide retirement or pension plans, or a bona fide occupational requirement.

The same cannot be said for federally regulated employers in Canada.

Section 15(1)(c) of the Canadian Human Rights Act (the "Act") still permits employers in the federal sector to impose mandatory retirement policies on their employees if they have reached "the normal age of retirement for employees working in positions similar to the position of that individual".

Sections 15(1)(a) and 15(2) of the Act provide that mandatory retirement policies are not discriminatory if they are based on a bona fide occupational requirement.

However, the Canadian Human Rights Tribunal's (the "Tribunal") decision in Vilven v. Air Canada, 2009 CHRT 24, which was issued on August 28, 2009, could spell the beginning of the end of the "normal age of retirement" provision in the Act.

In that decision, the Tribunal ruled that:

  • The mandatory retirement provision in section 15(1)(c) of the Act violates the equality provisions found in section 15 of the Canadian Charter of Rights and Freedoms, and on the facts of this case, was not "saved" by Section 1 of the Charter. Section 1 of the Charter allows it to be breached where it is a "reasonable limit prescribed by law as can be demonstrably justified in a free and democratic society"; and
  • In this case, Air Canada and the Air Canada Pilots Association ("ACPA") had not established that the mandatory retirement provisions in their collective agreement were a bona fide occupational requirement within sections 15(1)(a) and 15(2) of the Act.

Background

A provision in the collective agreement between Air Canada and ACPA required pilots to retire to at age 60. Two pilots who were forced to retire as a result of this provision filed a complaint under the Act.

In its first decision in this case, the Tribunal determined that age 60 was the "normal age of retirement" for positions similar to those occupied by the complainant pilots and that section 15(1)(c) of the Act did not violate section 15 of the Charter.

The complainant pilots (and the Canadian Human Rights Commission) applied to the Federal Court for judicial review. In a decision issued April 9, 2009, the Federal Court ruled that:

  1. the Tribunal had erred in its conclusions on the "normal age of retirement" for pilots; and
  2. section 15(1)(c) of the Act violated section 15 of the Charter.

The Court then remitted the case back to the Tribunal to determine if section 15(1)(c) of the Act could be saved under section 1 of the Charter. If not, the Tribunal would be
required to determine if the mandatory retirement provision was a bona fide occupational requirement under sections 15(1)(a) and 15(2) of the Act.  

Can Section 15(1)(c) of the Act be justified under Section 1 of the Charter?

On its second look at this issue, the Tribunal noted that the question of whether legislative provisions permitting mandatory retirement are justifiable under section 1 of the Charter had been considered in a number of Canadian cases previously, the most notable
being the Supreme Court of Canada's ("SCC") decision in McKinney v. University of Guelph [1990] 3 SCR 229.

In that case, the SCC ruled that the provision in the Ontario Human Rights Code that allowed for mandatory retirement violated section 15 of the Charter but was saved by section 1.   

The Tribunal went on to note, however, that in recent cases the courts and labour arbitrators had concluded that the social and economic context in which McKinney was decided had changed sufficiently to render the SCC's decision with respect to section 1 of the Charter inapplicable to present day circumstances. Specifically, it was noted that since 1990 there had been a "sea change" in the attitude toward mandatory retirement in Canada and internationally.

The Tribunal agreed with this conclusion citing, among other things: (1) the steps taken by provincial legislatures in Canada in recent years to abolish mandatory retirement; (2) the labour shortages that are predicted to plague Canada in the coming decades; and (3) the evidence of experts that called into question the purported negative effects of abolishing mandatory retirement that had been raised in McKinney.

The Tribunal also noted that the "normal age of retirement" criterion found in section 15(1)(c) was flawed because, among other things, it allowed the dominant player in an industry, such as Air Canada, to set the mandatory retirement age for the entire industry.

Another point seized on by the Tribunal, was that far less intrusive options than the blanket provision found in section 15(1)(c) of the Act were available to achieve the same goal. The most obvious was the allowance of mandatory retirement were it was based on a bona fide occupational requirement (see discussion below). 

On consideration of these facts and the applicable legal tests, the Tribunal concluded that section 15(1)(c) of the Act was not saved by section 1 of the Charter and thus refused to apply section 15(1)(c) of the Act to the facts in this case.  

Is the mandatory retirement provision a bona fide occupational requirement?

The second issue the Tribunal considered was whether the mandatory retirement provision in the collective agreement was a bona fide occupational requirement ("BFOR") and thus permissible under sections 15(1)(a) and 15(2) of the Act.

The Tribunal noted that in order to rely on the "BFOR" defence Air Canada and ACPA must satisfy the three-part test set out by the SCC in the "Meiorin" decision. (British Columbia (Public Service Employee Relations Commission) v. BCGSEU, [1999] 3 S.C.R. 3)

The three-part Meiorin test consists of the following:

  1. the employer must show that it adopted the standard - in this case, mandatory retirement -  for a purpose rationally connected to the performance of the job. 
  2. the employer must establish that it adopted the particular standard in an honest and good faith belief that it was necessary to the fulfilment of that legitimate work-related purpose. 

  3. the employer must establish that the standard is reasonably necessary to the accomplishment of that legitimate work-related purpose.  To show that the standard is reasonably necessary, it must be demonstrated that it is impossible to accommodate individual employees sharing the characteristics of the claimant without imposing undue hardship upon the employer.

The Tribunal further stated that in assessing whether it would be impossible to accommodate the employee without imposing an undue hardship, the employer must consider the three factors expressly set out in section 15(2) of the Act: health, safety and cost. However, case law had established that this list was not exhaustive and that factors such as employee morale and mobility, interference with other employee's rights, and disruption of the collective agreement could also be considered.

As is usually the case in relation to the Meiorin test , the Tribunal stated that the real issue between the parties was whether the complainant pilots could be accommodated without causing undue hardship to Air Canada and the pilots association.

In this regard, the Tribunal undertook a detailed analysis of Air Canada's operations and the international standards that it must comply with concerning the age of pilots, and concluded that, prior to 2006 (when the international standards changed) both pilots could have continued to fly as first officers (not as captains/pilots) without causing an undue hardship to Air Canada.

Although the Tribunal found the post 2006 situation more problematic, it concluded that there was also insufficient evidence to establish that it would be an undue hardship for Air Canada to accommodate the pilots and keep them in its employ.     

In relation to ACPA, the Tribunal stated that because it agreed to include the age 60 mandatory retirement provision in the collective agreement, it shared a joint responsibility with Air Canada to seek to accommodate the pilots. Relying again on the evidence of an expert, the Tribunal concluded that the rights of younger pilots - including their seniority rights - would not be substantially interfered with if pilots over age 60 were allowed to continue to work and thus it would not impose an undue hardship on ACPA. 

Comment

It is not clear yet whether the parties will apply to have this decision judicially reviewed.

If the decision stands, it will have implications for all federally regulated employers in that the mandatory retirement provisions in section 15(1)(c) of the Canadian Human Rights Act have been effectively struck down because they violate section 15 of the Charter and cannot be saved under section 1.

As a result, the Tribunal may have accomplished what the federal government has thus far been unwilling to do - prohibit federally regulated employers from having mandatory retirement policies, except where the forced retirement constitutes a bona fide occupational requirement.