BC Considers Eliminating Mandatory Retirement in 2007 


December 2006 - (Employment and Labour Alert)

co-authored by N. David McInnes, Michael J. Weiler and Louis Zivot
Employment and Labour Alert
N. David McInnes, Michael J. Weiler

Update: On April 25, 2007, the B.C. Provincial Government introduced Bill 31, eliminating mandatory retirement.  Effective January 1, 2008, the legislation will amend the Human Rights Code by changing the definition of age which will extend protection from age discrimination beyond the age of 65.  The effect of the legislation is that it will no longer be possible for employers in British Columbia to terminate employees simply because they have reached the age of 65. 

The legislation is not meant to affect the operation of a bona fide retirement, superannuation or persion plan or bona fide group or employee insurance plans.  However, it is likely that there will be further regulation and judicial guidance concerning those matters.  The legislation also permits specifically legislated age-based "discrimination" for such matters as Worker Compensation benefits.

Employers will have until the end of the year to phase in new policies and collective agreement terms to address the effects of Bill 31. 

On December 1, 2006 the BC Premier's Council on Aging and Seniors' Issues, chaired by Dr. Patricia Baird, submitted its report to the BC government.  The key recommendation of the Council to the government is that the Human Rights Code be amended immediately to extend protection from discrimination to those who are age 65 or over, thereby eliminating mandatory retirement in BC.

Based on comments made by Premier Gordon Campbell almost immediately following the release of the Council's report, it is now all but certain that the government will act without delay to eliminate mandatory retirement in BC by implementing the changes to the BC Human Rights Code recommended by the Council.  Premier Campbell has indicated that the legislative changes will likely be introduced in the legislature in the spring of 2007.

In moving to legislate an end to mandatory retirement, BC will join the majority of other Canadian provinces, including Ontario, which have now extended protection against employment discrimination to persons age 65 or older.

Although it is not at all clear at this point how many employees in British Columbia will choose to continue to work beyond age 65 as a result of the change in the law, there is no doubt that the change will give those who choose to continue to work the right to do so.  This new reality will pose significant challenges for employers. 

Employers in British Columbia can likely expect that there will be a transition period during which the status quo will continue to apply.  In Ontario, the transition period was for one year.  Following a period of transition, the expectation is that unionized employers will no longer be able to rely on mandatory retirement provisions negotiated in collective agreements, and non-union employers will not be able to implement or enforce a policy which requires mandatory retirement.

Although employers will continue to have the right to terminate employees summarily for just cause or by providing reasonable notice or paying severance in lieu whether they are older or younger than age 65, termination decisions cannot be based on age.  Accordingly, we expect that one result of the elimination of mandatory retirement will be that employers will need to be more attentive to assessing and evaluating employee performance over the course of their careers, to ensure that those who do choose to work beyond age 65 have the capacity to do so.

Employers will face numerous additional challenges as the new rules are introduced in BC.  The British Columbia government will need to consider whether employees who are age 65 or older must be extended equivalent benefit plan and pension entitlements and workers' compensation coverage as applies to younger employees which appears to be one of the recommendations in the Council's report.  However, it may be that with respect to the matter of benefit plan coverage and workers' compensation, BC may provide for differential treatment of employees over age 65 in respect of these entitlements.

There are of course many unanswered questions.  As the BC government provides more information about the timing and details of the end to mandatory retirement, we will provide timely updates to our clients.