Human Resources Committee on Feb. 10th, 2011

[Ed Komarnicki, Conservative, Souris—Moose Mountain, SK]

I understand that Mr. Pigott is a lawyer, and we've heard from another lawyer.

There has been some mention that Alberta, Saskatchewan, New Brunswick, and other provinces have done away with mandatory retirement, yet at least as far as New Brunswick is concerned, they have specific provisions that allow employers to differentiate between employees on the basis of age with respect to employee pensions, benefits, and other insurance plans. That has seemed to be an issue for other witnesses.

Are you familiar with those exemptions? I understand, with respect to New Brunswick, that the age-related protections do not apply to the termination of employment or to a refusal to employ because of the terms or conditions of any bona fide retirement or pension plans. Tell me if I'm correct in that. Explain it if you can, and give me your comments on that. Perhaps each of you could answer, in whichever order you want.

Go ahead, Philippe.

[Philippe Dufresne]

I can say briefly that you're correct with respect to the New Brunswick plan. It does allow it if it's part of a bona fide pension plan. That, in fact, was the subject of a Supreme Court decision last year when it debated what a bona fide pension plan meant. Did it have to be justified from the standpoint of safety and so on? The court found that it didn't and that it was really looking at the sincerity of the pension plan.

Those are types of measures.... In fact, in the Federal Court's recent decision, last week, the Federal Court judge found that making changes to benefits and making changes to insurance plans was a less intrusive way than blanket mandatory retirement to address some of those concerns about the complex social and economic matter of having deferred compensation and so on. That was specifically addressed.

[Ed Komarnicki, Conservative, Souris—Moose Mountain, SK]

We have some precedents for the type of language that could be used to accommodate that position, I take it.

[Philippe Dufresne]

In those decisions, yes, we do, and in that legislation in Ontario as well.

[Ed Komarnicki, Conservative, Souris—Moose Mountain, SK]

It is in Ontario as well. Do you have a copy of those pieces.

[Christopher Pigott, Legal Counsel, Heenan Blaikie, Federally Regulated Employers - Transportation and Communications (FETCO)]

I can speak to that if you'd like.

In fact, it is important to note that the New Brunswick legislation is slightly different, which the Supreme Court decision my friend referred to does establish as sort of a good faith qualification. That's when you're terminating someone. However, all provinces have legislation that specifically allows employers to differentiate, on the basis of age, between employees in respect of benefits, pension plans, and some other insurance plans.

I'll give you some examples. We have subsection 13(3) of the B.C. Human Rights Code, which says that discrimination based on age does not apply as it relates to:

the operation of a bona fide retirement, superannuation or pension plan or to a bona fide group or employee insurance plan, whether or not the plan is the subject of a contract of insurance between an insurer and an employer.

There are similar provisions in, as far as I'm aware, all provincial legislation, including section 7 of the Alberta Human Rights Act, section 16 of the Saskatchewan Human Rights Code, section 25 of the Ontario Human Rights Code, section 6 of Nova Scotia's Human Rights Act, and I believe in both Newfoundland and P.E.I. human rights legislation.

[The Chair, Conservative, Candice Bergen]

Thank you.

Madam Minna.

[Maria Minna, Liberal, Beaches—East York, ON]

Thank you, Madam Chair.

Mr. Farrell, I think in principle you support this kind of direction, but I wanted to ask you a couple of other things.

With respect to the Canada Labour Code, part III, which we are responsible for, how will this change affect it?

[John Farrell]

First of all, there is that provision dealing with severance pay. Severance pay was designed to permit a transition from one job to another. Now we're saying that this will continue beyond age 65.

Previously, it stopped at age 65, because under the old set-up it was expected that people would be retiring when they took a pension and therefore would no longer be entitled to severance pay in accordance with the current statute.

What we're saying is that if an employee voluntarily quits at age 67 or takes retirement at age 77, that employee is entering those arrangements on a voluntary basis and will not be entitled to severance pay, which is fundamentally the way it exists now.

But we want to make sure that the law makes this clear. We don't want to have people who decide they're going to retire at age 68 or 69 think that because of the way the current proposal is written they're entitled to severance pay. That's where we're coming from.

[Maria Minna, Liberal, Beaches—East York, ON]

Would increasing it to 65, or at least getting rid of mandatory retirement, create problems with labour negotiations? Right now, for instance, police forces tend to have an earlier retirement. If we remove mandatory retirement, will it put pressure on labour negotiators to increase the minimum requirement in dangerous areas of employment? Will that create problems?

[John Farrell]

Employers accept that while we need flexibility we have to be prepared to demonstrate that there are bona fide reasons for distinctions. You have to have fit police officers who can do their job, and if it's a bona fide occupational requirement, then perhaps they should be retired at a certain age. But it's going to be up to the individual industry to prove the bona fides of these matters—

[Maria Minna, Liberal, Beaches—East York, ON]

You don't see removing the mandatory retirement putting pressure on—

[John Farrell]

It could create pressure in collective bargaining and it could create litigation in which individuals are advancing their own view contrary to the public interest. It may be contrary to safety in sensitive situations. So we need flexibility to address these issues. We hope the legislation will build that flexibility in, so that you don't have to come back to Parliament to deal with issues that can't be dealt with by regulation.

[Maria Minna, Liberal, Beaches—East York, ON]

With respect to the more frequent health exams for older workers in the interest of public safety, you have engineers on VIA and pilots. Would the more frequent health tests have to be embedded in regulations to prevent potential pushback on age discrimination?

[John Farrell]

As for health benefits, the criteria have to be determined by health care professionals. There are physicians who specialize in geriatric medicine and they would have a view. There are physicians who can deal specifically with airline pilots, and there are physicians who can make recommendations with respect to truck drivers or locomotive engineers.

You have to rely on appropriate data from experts, but you have to have the flexibility once those decisions are made. You have to be able to manage those decisions without being accused of discriminatory practices.

[The Chair, Conservative, Candice Bergen]

Thank you.

Mr. Komarnicki, five minutes.

[Ed Komarnicki, Conservative, Souris—Moose Mountain, SK]

Thank you.

Perhaps I will pose a question to the two lawyers. With respect to the New Brunswick case, I would suspect that they called expert testimony to show the cause and effect of age on benefits and pensions and so on. Do you know who they might have been?

Another question flowing from this is that there was a suggestion, at least I think so, by Mr. Farrell that there be an explicit provision—I would gather in the legislation we're considering—to allow employers to establish workforce skills testing programs that commence or increase in frequency as an employee's age increases, which in itself would be age discrimination. But if one were to do that, what's your point of view on that? Secondly, is there any legislation that allows for that to happen?

I have a third question, and I'll leave it at that. As you start thinking about this thing it becomes more complex. Employers can always prove an issue of bona fide requirements, but I suspect it would be much harder for them to do that on an objective or subjective basis than allowing for an exception specifically provided for by legislation, as Mr. Farrell suggests.

Perhaps, Christopher, you may want to start, and then we'll move over to Philippe. I had three points.

[Christopher Pigott]

Sure.

My first point is I don't know, with respect to the New Brunswick decision. Frankly, I'm not sure what the nature of the expert evidence was there specifically.

However, I will say that one of the pre-eminent concerns in that case was the fact that there are existing highly complex pension structures that are predicated on the idea that people will retire at 65. So what the court was doing there was I think treading quite a fine balance between legitimate employer workplace concerns and pre-existing structures and the rights of employees to be free from discrimination. That's why they really said the test here is a good faith one based on the intentions of the employer. The employer can't be using a pension plan as a sort of sham to retire people at 65.

In terms of your second question—I think your second and third questions are related—with respect to the idea that you're going to have some sort of differentiation, whether it be based on skills testing or medical testing, in respect of age, and would it be a good idea to have an explicit legislative provision in the legislation that allows for that, as opposed to, say, going down the road of having to prove a bona fide occupational requirement, it's our position that, yes, a specific exception is necessary. And that's really so that we avoid five-year periods of litigation that go to the question of whether or not a specific test that is applied.... As we've heard, these tests do exist. In the airline industry, tests increase in frequency at age 40. It's important that neither employers or employees are going to court to try to justify the validity or invalidity of those laws every time an issue arises.

[Philippe Dufresne]

My answer is the same with respect to the New Brunswick case. We weren't involved in that case, but the Supreme Court was dealing with the legislative interpretation.

On the issue of whether courts talked about the impact on benefits and pensions and so on, in the Vilven decision--indeed, Professor Kesselman, who was here this morning, was a witness in this case. The Federal Court talked about his testimony on the issue of what would be the impact of removing mandatory retirement. So there is evidence in this case.

And on the third, does the legislation allow it, the Canadian Human Rights Act already allows for a bona fide occupational requirement. It's a fair point that in some cases it'll lead to litigation, because you have a specific case. The issue is, does that meet this obligation? The legislation, however, is flexible in that it already allows for the making of regulations to specify the standards for undo hardship, and that's subsection 15(3). So there is already this power down the line to put in place regulations.

[Ed Komarnicki, Conservative, Souris—Moose Mountain, SK]

Okay. I'll just stop you there because I have another question flowing from that.

If we change the regime from what was to what is now, is that change going to impact a whole bunch of regulations that exist in different occupations presently that would need changing?

[Philippe Dufresne]

Mr. Farrell mentioned the human rights benefit regulations, and they do use the same language of “normal age of retirement”. So there would need to be some corresponding amendments to those regulations—

[Ed Komarnicki, Conservative, Souris—Moose Mountain, SK]

But what about other legislation?

[Philippe Dufresne]

With respect to other legislation, it seems that, legislatively speaking, it wouldn't be as direct as for those regulations, but factually, there are some elements to consider—

[Ed Komarnicki, Conservative, Souris—Moose Mountain, SK]

How many regulations do we have out there that would need changing? Do you know?

[Philippe Dufresne]

I know for a fact that there would be one regulation to change—