Mandatory retirement in Canada

The summer issue of Labor Law Journal carried an interesting article about the state of mandatory retirement practices in Canada. “The Uncertain State of mandatory Retirement in Canada” queries to degree to which mandatory retirement at age 65 has been abolished in Canada.

Presently, Canadians subjected to a mandatory retirement rule can file human rights complaints based on age discrimination. (Some jurisdictions may also preclude claims where the claim arises from a requirement in retirement or pension plan.)

All jurisdictions also have statutory retirement requirements for some occupations (e.g., police, judges). In other occupations, employer seeking to impose mandatory retirement must demonstrate that the policy comprises a bona fide occupational requirement.

The Meiorin test for bona fide occupational requirements requires the policy must be adopted in good faith, for a rational job-related purpose, and is reasonably necessary to accomplish that purpose. Few mandatory retirement policies have met these criteria when challenged, although some employers have successfully argued accommodation imposes undue hardship.

The article concludes with an interesting discussion of legitimate strategies available to employers seeking to create turn over among older workers. These include reducing the availability of pensions (these were historically the quid pro quo for mandatory retirement), requiring medical or competency testing, offering financial incentives for retirement, or provide notice of termination (with the risk of an age discrimination complaint).

-- Bob Barnetson