Human Resources Committee on Feb. 10th, 2011

[The Chair (Ms. Candice Hoeppner (Portage—Lisgar, CPC)), Conservative, Candice Bergen]

Good morning, everyone.

I would like to call our meeting to order.

We are beginning meeting number 43 of the Standing Committee on Human Resources, Skills and Social Development and the Status of Persons with Disabilities.

Our orders of the day are pursuant to the order of reference of Monday, December 6, 2010. We are studying Bill C-481, An Act to amend the Canadian Human Rights Act and the Canada Labour Code (mandatory retirement age).

We are very pleased to have three witnesses with us today, two of whom are in the committee room with us. One witness is via video conference from Vancouver, B.C.

Today we are welcoming Mr. Robert Neil Kelly, who is part of Fly Past 60 Coalition, and George Vilven, who is also with the same organization.

Welcome, gentlemen.

We also welcome Jonathan Kesselman, a professor with the School of Public Policy at Simon Fraser University.

Thank you for being here as well, Professor.

Each one of you will have approximately seven minutes for a presentation. After all of your presentations are complete, we will then go to questions from the committee members.

We will begin today with Mr. Kelly. If you will begin, we'd love to hear from you.

[Robert Kelly, Fly Past 60 Coalition, As an Individual]

Madam Chair, good morning.

I'm here to speak on behalf of the Fly Past 60 Coalition at the request Mr. Hall, who is unable to attend today.

The Fly Past 60 Coalition is a group that was formed by a segment of Air Canada pilots who oppose mandatory retirement. We're a group of 200 Air Canada pilots, past and present, who have joined together to pursue our mandatory retirement complaints.

We've achieved reinstatement of my employment by Air Canada by reason of an order of a tribunal issued November 8, 2010.

I was also directly involved in our second hearing, known as the Thwaites hearing, before the tribunal. That hearing involved 70 additional Air Canada pilot complainants and was held in October 2009 through January 2010. That decision is still pending.

That hearing dealt almost exclusively with the interpretation of the words in paragraph 15(1)(c) of the Canadian Human Rights Act, namely, “normal age of retirement for employees working in positions similar to the position of that individual”. I would like to offer the committee some candid observations on the current application of that paragraph, as expressed by the tribunal and by the Federal Court, with a view to putting the paragraph in context.

Our analytical starting point with respect to the statutory paragraph is, appropriately, the 1977 Standing Committee on Justice and Legal Affairs, which deliberated the insertion of paragraph 14(c), now paragraph 15(1)(c), into the act. Two pages from the parliamentary transcript of 1977 are appended to this submission.

The issue raised in that committee was whether what is now paragraph 15(1)(c) essentially condoned systemic discrimination. The issue was raised by Member Fairweather to the then deputy minister of justice, Mr. Barry Strayer, page 6:21 of the transcript, second page, at the bottom.

His answer was that permitting termination on the basis of age would not be a discriminatory practice as long as everyone else in that kind of employment was terminated at the same age. I make particular reference to his words “everyone else”, for these words appear to have been the key factor in reducing any opposition to the enactment of that potentially problematic provision.

Unfortunately, that qualification, “everyone else”, appears to have been totally forgotten. It never came before either the tribunal or the courts in any subsequent proceeding where the paragraph came into question until we raised the issue in the Thwaites hearing. Instead, both the tribunal and the superior courts, in a number of cases, independently deemed that the provision was intended to be interpreted instead by a statistical count of individuals doing similar work. In other words, the normal age of retirement was determined by not everyone else, or 100%, but by a simple majority of employees doing similar work.

In the judicial review of my 2007 tribunal hearing, the Federal Court denied that a violation of that paragraph had occurred because it found that Air Canada's pilots constituted approximately 54% of the total Canadian airline pilot population.

The Federal Court did express significant concerns with the wording of the paragraph, however, including the following.

One, the wording “individuals doing similar work” is uncertain, and, as a result, few employees are able to know in advance of their termination of employment who is included and who is not included in the classification. As a result, there is little certainty as to the normal age of retirement prior to an employee having his or her employment terminated.

Two, it is almost impossible for employees to determine the numbers doing similar work because individuals do not have access whatsoever to employment statistics of competing organizations. In the Thwaites proceeding, we actually had to issue subpoenas to over 30 different Canadian airlines to obtain their pilot employment statistics.

Three, dominant employers, such as Air Canada, are effectively able to set the norm and thus unilaterally determine the normal age of retirement by fiat, thereby usurping the role of Parliament.

Four, the Federal Court had difficulty accepting the concept that discrimination on the basis of age should be tolerated provided that the discrimination is applied against the majority of the employees. This proposition clearly offends the intent of the Canadian Human Rights Act and was not, in the opinion of the Federal Court, consistent with contemporary Canadian values.

The court suggested in its 2009 decision that the solution to this lay in the application of the charter and in the decision rendered by the same judge last week. That provision was found to offend the charter.

Five, in that decision the court identified one additional problem with the statutory provision, namely, that although the normal age of retirement may be determined by a free and collective bargaining between a dominant employer and its union, that normal age of retirement would then become applicable to employees of other companies who did not negotiate their age of retirement, including those employees in non-unionized companies.

As well, it is one thing to be accorded rights under the Canadian Human Rights Act; it's entirely another thing to actually realize them.

Despite the good intentions of Parliament in 1977 in allowing a limited exemption to the general prohibition against age discrimination for mandatory retirement, the reality is that it's almost impossible for the average Canadian to realize those rights when they're breached by powerful, litigious employers and unions.

It took over five years from the date when my employment was terminated for me to follow the due legal process to have my employment reinstated, and indeed, that legal battle is not yet ended, with Air Canada continuing to appeal the decisions of the tribunal and the court. Justice delayed is indeed justice denied, and the uncertain and inappropriate wording and restrictions of paragraph 15(1)(c) of the Canadian Human Rights Act, in our view, should be repealed so as to prevent denying other Canadians the ability to be free from age discrimination in their employment.

I would be more than happy to entertain your questions regarding my submissions.

Many thanks.

[The Chair, Conservative, Candice Bergen]

Thank you very much, sir.

We will now go to Mr. Vilven, please.

[George Vilven, Fly Past 60 Coalition, As an Individual]

Good morning, Madam Chair and fellow committee members.

My name is George Vilven. I would like to thank you for allowing me to appear here to put a human face on what this bill is all about. Because of the time constraints, I will cover some of the major points but would encourage you to read my submission. I believe you will find it interesting how Air Canada and its pilots' union treat their employees and their fellow pilots.

When I started my complaint in the year 2003, I was told by the Canadian Human Rights Commission that it would take approximately a year and a half from start to finish. We are now going into the eighth year.

The union is telling its membership that this is far from over. It plans to appeal it to the Federal Court, to the Federal Court of Appeal, and on to the Supreme Court. Once again, the union is telling its members that this is far from over.

A large part of the Canadian population believes that mandatory retirement is no longer in existence. Yet it is alive and well in the federal labour code.

Here are some interesting facts. Air Canada is the only airline in Canada that does not allow its pilots to fly past the age of 60. WestJet, Air Transat, and Skyservice all allow their pilots to fly past the age of 60, and some allow it beyond the age of 65. All 45,000 American airline pilots.... United, Continental, and American Airlines also allow their pilots to fly up to the age of 65.

In 2006, ICAO changed the rules that allow captains to fly overseas up to the age of 65. British Airways, Qantas, Air New Zealand, and El Al, to name but a few, are all flying up to the age of 65, and some beyond.

Yet Air Canada, in a letter, stated to its employees who wanted to continue the option of flying that it will not stop until ordered to do so.

I have paid a huge personal price to pursue this complaint. I have been harassed. I have been threatened. I have lost family friends—I guess they weren't friends. My wife refers to this as the gift that keeps on taking.

I have detailed what happened to me at a retirement party in Winnipeg in the year 2006. I have included this in my submission. I believe you might find it interesting and sad what happened to me at this retirement party.

I can say unequivocally that I was a much better pilot when I was forced to leave the company than when I arrived. And why is that? Experience does count. Training and the mentoring of fellow pilots adds up to the fact that over the 20 years a lot of things were learned.

In closing, I would like to say that for the majority of the pilots at Air Canada, other employees at Air Canada, and the remaining 800,000 employees covered by the federal labour code, this request is now almost exclusively in your hands.

I would be more than happy to answer your questions, if you have any.

Thank you, Madam Chair.

[The Chair, Conservative, Candice Bergen]

Thank you, Mr. Vilven.

We will now continue with Professor Kesselman. Are you able to hear us all right, sir?

[Professor Jonathan Kesselman, School of Public Policy, Simon Fraser University, As an Individual]

Yes, I am. Thank you.

[The Chair, Conservative, Candice Bergen]

All right. Go ahead. You have seven minutes.

[Prof. Jonathan Kesselman]

This morning I'd like to present key points on mandatory retirement from an economic rather than a human rights perspective. Fortunately, the economic perspective concludes in a way that is fully consistent with the human rights perspective. I'll approach this matter by describing major fallacies about mandatory retirement, which I'll abbreviate as MR, and I'll go over the relevant facts.

MR practices are often described as voluntary agreements between an employer and its employees. In fact, MR and the associated pension plans are not an agreement between an individual employee and the employer. These agreements are typically mediated by a union, and if they involve a vote, it is majority-rule imposed on all the employees. In a company applying MR, all employees are subject to it regardless of their individual wishes.

Some have argued that a worker should take a job elsewhere if he or she does not like MR at the current employer, but that option is costly to the individual, who loses wages and seniority. It also involves high mobility costs for the worker situated in a smaller city or working in a union-dominated industry. Moreover, some workers, such as women and recent immigrants, may have a stronger need to work until higher ages because of a shorter work history and inadequate retirement savings, either individually or through a company pension plan.

A common argument is that eliminating MR would act as a barrier to the promotion prospects of younger workers. This point may have been true in the 1960s or even as recently as the 1990s, but it is no longer valid, given the evolving demographics of Canada. We are witnessing an accelerating retirement of baby boomers from the workforce and an emerging smaller cohort of younger workers.

Canada is entering an era of worker scarcity and skill shortages in many occupations and industries that will be seeing faster promotions for younger workers. Some argue that Canada will need to sharply increase immigration of younger workers to satisfy the needs of the economy. But to forego the skills and experience of older workers who wish to continue working, which MR does, is a shortsighted and economically wasteful policy. It also assumes that the economy has a fixed number of jobs available, which is demonstrably false, as the supply of workers and skills is a key constraint on the size of the productive economy.

MR has also been described as necessary for employers to easily get rid of older workers who have lagged in their on-job performance. This argument assumes that employers do not have effective systems to evaluate the performance of workers of all ages and to dismiss poor-performing workers regardless of age. Only a badly managed firm would rely on MR at age 65 to get rid of a younger worker, such as a 40-year-old, who was not performing up to standard.

Similarly, MR has been supported as a means for firms to retire older workers who are overpaid relative to their productivity. Again, this assumes that employers do not have adequate systems for worker assessment and appropriate flexibility in compensating employees in line with their individual performance.

MR has been described as solely a private matter between workers and their employers and not an issue of concern for the general public or public policy. This position is incorrect, since the practice has implications for governments and the taxpaying public. Workers who are forced to retire by virtue of their age and before they wish to stop working impose various costs on the public treasury. They contribute less in taxes when their earnings cease or decline; they draw more in public pensions that are conditioned on incomes; and with the generally worsening health associated with retirement, especially forced retirement, they impose more burdens on our publicly financed health care system.

Prohibiting MR practices in industries subject to the Canadian Human Rights Act by amending the act would only bring the federal government into line with reforms already implemented in all the provincial human rights acts, and very belatedly at that.

Twenty-five years ago, in 1986, the Canadian government stopped the practice of MR with respect to the federal public service. Also in 1986, the U.S. prohibited MR practices nationally in that country. Many other advanced economies have done likewise in the years since then. Nowhere have any of the adverse consequences predicted by supporters of MR emerged as significant issues.

From an economic perspective, then, mandatory retirement has outlived any usefulness that it might have once offered. The interests of both the economy and older workers would be best served by prohibiting the practice under the Canadian Human Rights Act.

Thank you. I will welcome questions.

[The Chair, Conservative, Candice Bergen]

Thank you very much.

We will begin our first round of questions. It will be a seven-minute round. Just so the witnesses are aware, that would include the questions and answers. I'll let you know if we're getting close to the seven minutes.

We'll begin with the Liberals, with Madam Folco.

[Raymonde Folco, Liberal, Laval—Les Îles, QC]

Thank you, Madam Chair.

I wish to once again welcome Mr. Vilven, Mr. Kelly, and Professor Kesselman.

This is my first meeting with you. As you know, I'm the person responsible for bringing this bill to Parliament, so welcome.

Somebody asked me why we are working on this bill, why I thought of bringing this bill to Parliament. In fact, we were actually, as we say in French, interpellé, that is to say, when Mr. Justice La Forest gave his decision from the courts, what he said was it was a complex matter and one that should be resolved by the legislatures. This is what Mr. Justice La Forest said.

We thought it would be not only useful, but important for the legislature in Canada to follow up on this, since really the ball was in our court. This is the reason we're all meeting to discuss this.

I do have several questions. I'd like to ask a question of the former airline pilots, if I may, to begin with.

How many people in your group—I don't know whether I can call it an association, but the group you have formed—do you represent? And how many people, what percentage, does your membership represent of the number of airline pilots who have either reached the age of 60 or are likely to reach the age of 60 within the next five years?

I'm asking the question of one of you two, and possibly Professor Kesselman, eventually.

Mr. Kelly.

[Robert Kelly]

Yes, I'll answer that, if I may.

We represent approximately 200 pilots, past and present, some retired, some still at the airline facing retirement. I would rather suspect there's a considerably larger percentage of the airline that's anxiously watching our progress and they don't feel inclined to put their head over the parapet and have it shot off when it will be settled long before they get to that position.

I am actually back to work now. Because of the delay in my reinstatement, I'm flying as a first officer because I'm now over the age of 65. I was a captain for 23 years prior to that.

I've run into very little adverse reaction from the crews I've been flying with, and it's been almost 100% positive, with a great many showing support who aren't on our list. It's interesting to see there's probably a considerably larger percentage than we represent on paper that support us.

There are approximately 3,000 pilots at Air Canada. As you are probably aware, complaints through the Canadian Human Rights Commission cannot be filed until the alleged discrimination has occurred, so it's impossible to file a complaint prior to retirement. At that point, you're no longer a member of the pilots association, so you're not represented by them. We are in fact actively opposed by them, which made the whole process extremely difficult.

Worldwide, the pilot profession is well over 65 now in mandatory retirement ages. Many have done away with it altogether. Australia and New Zealand were probably some of the first. Canada has had no age limits on airline pilots for almost 26 years. The position of Transport Canada is that it's far better served by individual assessments rather than blanket age restrictions, and they refuse to apply these age restrictions from the international body within Canada.

[Raymonde Folco, Liberal, Laval—Les Îles, QC]

Excuse me for interrupting. I only have seven minutes.

I wanted to bring up a fact that I think is important and that has not been mentioned. When I first started looking into the possibility of bringing this bill to Parliament, I looked at what was happening at the level of the provinces, in the provincial legislatures, because this bill does not touch Air Canada pilots only. In fact, it is aimed at all employees of crown corporations in Canada.

I looked at the employees of the equivalent of crown corporations at the provincial level, and what I found was that all provinces and territories, with no exceptions, actually had abolished mandatory retirement. New Brunswick, on the other hand, brought in a more flexible system, but it did abolish it as well.

I wanted to bring that bit of information. I think it's important.

My question is to Professor Kesselman. Professor, you have, I think, a wider view. I've read so much of what you've written, obviously. Would you tell us how other institutions reacted institutionally when the mandatory retirement element was withdrawn from their institutions? How did it work? Did it work out reasonably well? What sort of model can they offer to Air Canada and other crown corporations?

[Prof. Jonathan Kesselman]

Briefly, this would depend very much on the type of industry. The most studied industry in the U.S. is higher education and professors, who, because of the enjoyment of the work and the great working conditions, and so on, often will work into their late 60s and into their 70s.

More generally, I think the adaptation needed is, in some firms, a tightening up of the method of evaluating performance. At least, that is perceived as an issue. And of course, giving better performance evaluations can be beneficial to the employer and employees, not only when people are approaching 65 but when they're 40 or 25. They can work to the benefit of both parties in improving individuals who are having issues and in properly rewarding people for their performance.

One other area that has come up more recently, particularly in Canada, is the issue of job-related benefits, such as life insurance and extended health insurance. In this area, because certainly our mortality rates, our risk of dying in any given year, are higher when we're 67 than when we're 57 or 27, life insurance becomes more costly. Extended health insurance becomes more costly, and disability insurance particularly does. If I understand it, at least in most jurisdictions, the courts have allowed differential treatment of individuals over age 65 under life insurance and disability insurance coverage paid for by the employer. That, to me, seems reasonable. Yes, it is a form of discrimination, but it is one whereby we don't want the cost of employing an older worker to become so high that the employer really wants to get rid of that person.

By and large, the adaptation has been fairly straightforward. It is nothing really insurmountable. It is not all that difficult. It's really, in essence, something that can be handled. It's not an issue that should make anyone shrink from pursuing the proposal you have on the table.

[The Chair, Conservative, Candice Bergen]

Thank you very much. We will now go to Madame Beaudin, please.

[Josée Beaudin, Bloc, Saint-Lambert, QC]

Thank you very much, Madam Chair. Gentlemen, welcome and thank you very much for being here.

You will need your earpiece, since I will ask my question in French.

[The Chair, Conservative, Candice Bergen]

Let me double-check.

Mr. Kesselman, do you have translation? Mr. Kesselman, can you hear us?

He doesn't appear to be hearing us. Stop the time.

Can you hear us Mr. Kesselman?

[Prof. Jonathan Kesselman]

I can hear you. I'm going into translation. Is that correct?

[The Chair, Conservative, Candice Bergen]

Yes. We were hoping you could hear translation, but we weren't certain that you could.

Are you telling us that you could not hear any translation?

[Prof. Jonathan Kesselman]

I can hear only your voice.

[The Chair, Conservative, Candice Bergen]

All right. What we'll now do is have the translator speak to see if you can hear the translator.

[Prof. Jonathan Kesselman]

Yes, indeed, I can now hear, thank you.

[Josée Beaudin, Bloc, Saint-Lambert, QC]

Can everyone understand me clearly? Can everyone hear the interpretation?

I have one question on my mind that I would like you to think about and answer. I listened to your comments, I read Ms. Folco's bill and I went over the documents. You are airplane pilots. I assume that there are physical fitness requirements involved in hiring airplane pilots and that you must undergo tests on a yearly basis. I assume that your health is evaluated annually, so that you can continue to fly aircraft. I think that, instead of using age as a criterion for deciding when someone should retire, we may just as well say that all those with blond hair can no longer be pilots.

Who do you think should determine the retirement age? How should this be done? Should employers and unions make the decision together? Could it be done following an annual medical? Who should determine the retirement age in your line of work and in similar fields?

[Robert Kelly]

Unfortunately, I'm not getting simultaneous translation. I'm getting French only, français seulement.

[The Chair, Conservative, Candice Bergen]

It's on your panel there.

We'll start again, Madam Beaudin.

[Robert Kelly]

Pardon, madame.