Managing Group Benefit Entitlements for Ontario’s Aging Population

By: Arjun Dhir for TLOMA

In December 2006, the Liberal government abolished Ontario’s mandatory retirement age of 65. By doing so, the Ontario Government empowered individuals aged 65 and older by allowing them to choose when they are ready to exit the workforce. However, the Government simultaneously provided employers with the freedom to decide how to treat these older workers, particularly in regards to whether or not to continue providing group benefits past a certain age.

From a legal perspective, the Ontario Human Rights Code (the “Code”) permits employers to exclude or make distinctions in employee benefits pertaining to employees older than 65 and younger than 18. Section 25 (2.1) of the Code states that, “the right to equal treatment without discrimination because of age is not infringed upon by an employment benefit [plan][Emphasis added]. In practice, this clause essentially gives employers the unfettered right to remove or cut the benefit plans of employees who choose to continue working beyond the age of 65.

However, in May 2018, the Ontario Human Rights Tribunal (the “Tribunal”) released an interim decision in Talos v Grand Erie District School Board, declaring the aforementioned section 25 (2.1) to be unconstitutional. In this case, the applicant, Mr. Wayne Talos (“Mr. Talos”), a high school teacher, was greeted with an unwelcome surprise on his 65th birthday when his employer, the Grand Erie District School, denied him continued access to the School’s health and dental benefits. In their decision, the Tribunal concluded that this section constitutes “age discrimination” and accordingly, violates the universal equality guarantee set out in Section 15 of the Canadian Charter of Rights and Freedoms. Ultimately, in siding with Mr. Talos, the Tribunal laid the foundation for a drastic shift in this segment of Ontario’s workforce.

Canada, like many First World countries, has an aging population. For the first time ever, there are more seniors in our country than children aged 14 and under.[1] This disparity is projected to grow as life expectancies continue to rise and fertility rates steadily fall. Furthermore, it is projected that by the year 2031, one in four Canadians will be over the age of 65. What this means is that Canada’s workforce is old – and only getting older. People are staying in the workforce longer than ever before. In a country and province where the tax-base is pivotal to continue providing support for vital social programs – this aging workforce will be tasked with keeping the economy afloat.

These statistics will undoubtedly have a significant impact, both financial and non-financial on employers. As individuals work later into their lives, they will also remain a member of their company’s group benefits plans for a longer period and at a stage in their lives when their health is rapidly deteriorating and thus require these benefits the most. The 2016 ”Working Seniors in Canada” Census Report, indicates that in 2015, roughly 30% of the seniors in the workforce were employed in full-time roles. Furthermore, the Report indicates that 43.8% of working seniors are dependent on their employment income to support them – a figure that has continued to rise in each census. Additionally, up to 20% of senior men and 30% of senior women qualify as ‘low-wage employees.’[2] What these statistics illustrate is that a significant number of working seniors are not only dependent on their income to support them but, more importantly, are clearly dependent on the group benefit plans they are currently receiving from their employers.

Properly handling older employees remains a pressing and very delicate challenge for employers. Historically, it was common practice for individuals to proudly retire at age 65. However, now many seniors continue to work and extend their employment well beyond their 65th birthday. As employers, terminating or attempting to ‘performance manage’ these employees can be costly and expose them to potential discrimination claims. Many employers are understandably afraid to walk this fine line. Instead, these employers and employees have adopted a practice of doing nothing in an attempt to pressure the other party to take action. In many situations, employees wait to be packaged out by their employers, while the employer simply hopes the employee will eventually choose to retire and forego their entitlements. These situations are precarious for both parties and seldom results in a ‘win-win’ resolution.

At this juncture, the full impact of the Tribunals decision in Talos has yet to come to fruition. With that said, the Tribunal has clearly reiterated that discrimination of any kind in the workplace will not be tolerated. Empowering employees in this manner protects vulnerable sectors of society from exploitation by their employers. Consequently, employers must remain educated and take progressive steps when addressing their aging workforce.

Ultimately, the best way for employees and employers to protect themselves from potentially unfortunate circumstances is to seek out professional legal advice.

This article provides general information and should not be relied on as legal advice or opinion.

Special thanks to Summer Law Student William Quaglietta for assistance with the research and writing of this article.

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