Cutting off Older Employees' Benefits Discriminatory?

A look at the HRTO Decision in Talos v Grand Erie DSB

The Human Rights Code (the "Code") says it is unlawful to force retirement on workers at the age of 65.

There is a loophole, however. The Code still allows employers to provide different, and often less favourable, health and pension benefits to those who are over the age of 65 and still actively working. Effectively, this makes it financially difficult for some to continue to work, and force them into retirement.

Is that fair and equitable, or lawful?

The Human Rights Tribunal of Ontario (the ''Tribunal") recently had to decide on this issue in the case of Wayne (Steve) Talos v. Grand Erie District School Board. Wayne Talos ("Talos").

In that case, a 65 year old school teacher employed by the Grand Erie District School Board (the "Board") alleged that the provisions, which allow the Board to not give him certain benefits and contribute less to his pension plan, infringe on his rights and are unconstitutional.

The Facts:

Talos is a high school teacher. And, a good worker with a clean record of employment for decades. He was in good health and wished to continue to work past 65. In fact, he needed the income. Upon reaching 65, however, he was informed by the Board that he is no longer eligible for certain benefits, including insurance schemes. The loss of these benefits have had a significant impact on Talos and his family. He has an ill wife and relied upon the benefits to help cover the costs of her expensive medications.

Talos challenged the benefits cut-off, and the case went to the Tribunal for years of legal battle.

The legislated provisions:

At issue are the following legislated provisions, which, when put into play together, resulted in a "loophole" of sorts, allowing employers to unilaterally cut off an employee's benefits based on age:

  • S 25(1) of the Code prohibits discrimination in terms of certain employment health and pension benefits on the grounds of age.
  • S.25(2.1) of the Code, on the other hand, says that there is no discrimination if the employment health and pension benefits are administered in accordance with the laws contained in the Employment Standards Act (the "ESA").
  • Interestingly, the ESA defines age as anything over the age of 18 and below the age of 65.
  • The end result is the law effectively allows discrimination on the basis of age, and putting older employees at a disadvantage.

The Issue:

In light of the above, the Tribunal was tasked with determining whether Talos's rights under s 15(1) the Canadian Charter of Rights and Freedoms (the "Charter") to equality before the law and to be treated without discrimination were breached. If so, was the infringement justifiable.

Tribunal Findings:

The Tribunal held that Talo's right to equality was infringed.

First, the Tribunal found that there is a clear distinction in the treatment of workers purely based on age. The Code thus creates a prima facie distinction based on age.

Second, this distinction creates a disadvantage for older workers when compared with similarly positioned workers who are under the age of 65. Yet, there is no acturial data to support why this should be the case. There is no proof that generally, as soon as someone hits the age of 65, they would stop being a good worker.

Specifically in the case of Talos, he suffered a number of disadvantages above and beyond the loss of the benefits themselves, including loss of peace of mind, financial consequences and being subject to needs-based testing. The public schemes in place for older citizens, such as pension benefits and Ontario health care plans, were not enough to make up for this loss.

There is a continuing damaging effect to this already negative disadvantage. Less favourable treatment to older workers, if continued to be permitted, reinforces negative stereotypes, increasing disadvantages they already face and devaluing their contributions to the workplace. This impact will be felt even more by the vulnerable, who may be required to work later in life.

Granted, there is a reason why employers choose to cut off an employee's benefits at the ESA-permitted age of 65. The objective is to keep benefit schemes financially viable, and is valid. However, there must be better ways than cutting off older workers' benefits across the board.

Therefore, the Tribunal found that there is no justification for this breach. This means, the Board was not permitted to rely on s 25(2.1) of the Code to cut off Talos's benefits.

The Takeaway:

Age discrimination remains a developing issue, with many questions unanswered. We anticipate there to be years of debate on this topic before we can have some certainty as to how the law operates in this area.

In this particular case, because the Tribunal does not have the jurisdiction to strike down legislation or bind subsequent courts, s 25(2.1) of the Code technically continues to be in effect. However, the authorities may rely on Talos in future cases and be more generous to older employees.

Consequently, employers are encouraged to turn their minds to reviewing their employment health and pension benefits. Is there a potential breach? If so, talk to insurance providers and explore different options for older workers. If there is good reason to continue a age 65 cut-off, make sure there is acturial data to support it.

*Article contributed by Hannah Goranson