Human Resources Committee on Feb. 10th, 2011

[Prof. Jonathan Kesselman]

Those do become more costly. The pension contribution is probably the largest single cost of these employee fringe benefits, and that actually has a declining cost for pilots who are allowed to, and choose to, work longer.

I don't know whether it's a wash overall, but, yes—

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

Are you familiar with the New Brunswick limited age discrimination to deal with these specific areas that you raise? What's your position on that?

[Prof. Jonathan Kesselman]

Not New Brunswick specifically, but I do know this has arisen in Canada. In my own province, British Columbia, it is allowable for the employer to differentiate at age 65 and beyond in some of these fringe benefits. I think which ones may be actually listed in the legislation.

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

Okay. And you're okay with that?

[Prof. Jonathan Kesselman]

Overall, I think it is reasonable. It's arguable, but I think it is reasonable.

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

You were retained by the Fly Past 60 Coalition, and you are presently retained by them?

[Prof. Jonathan Kesselman]

No, not presently. This was a case that ended in the previous...actually, it was in 2009, not 2010.

[The Chair, Conservative, Candice Bergen]

Thank you very much.

Our time is up for the seven-minute round. I know Mr. Savage had a very quick one-minute question. I'm going to let him do that, and then I'll see if there's anyone else with a one-minute question.

I'll let Mr. Savage go quickly.

[Michael Savage, Liberal, Dartmouth—Cole Harbour, NS]

Thank you, Chair.

In terms of Tony's comments about the unions, I know that Madam Folco has consulted with a number of unions, including the FTQ, who are supportive of this measure.

[A voice]

CSN.

[Michael Savage, Liberal, Dartmouth—Cole Harbour, NS]

CSN and others.

My question is I think for Mr. Kesselman, because you raised this as an economic argument.

We all know the demographic crunch that's coming down on Canada. The Association of Canadian Community Colleges has an interesting statistic that indicates that right now 44% of Canadians are not in the workforce—that's seniors, that's children, that's the unemployed—but that the number is going to rise to over 60% by 2031, which provides obvious challenges for Canada.

Just generally, how much of an opportunity do we have to fill some of those skill gaps if we do away with mandatory retirement or have a serious look at it?

[Prof. Jonathan Kesselman]

I think we have a significant, but obviously still limited, ability to get more years out of people who wish to work more years.

Yes, I mean, that certainly is an important reason, one among many, on the economic side for removing the constraint of mandatory retirement.

[The Chair, Conservative, Candice Bergen]

Thank you.

I'll just give Mr. Komarnicki one more minute.

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

Thank you, Madam Chair.

Mr. Martin touched on the issue of younger workers. Certainly within the commercial airline industry there is a limited number of opportunities for employment of pilots. At Air Canada, I understand, that's about 3,000 pilots at any one time. The only way a new pilot can be employed, or one of the ways, is if an existing pilot leaves for reasons of health, career change, or retirement.

Would you agree with me on that?

[Robert Kelly]

Those would be some of the factors. Obviously, were the airline to increase in size, that would have a proportionately larger--

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

Just speaking to where Air Canada is right now, it would prevent the flow of younger pilots into the system if the mandatory retirement age were lifted altogether, without any exceptions, because there simply wouldn't be room for mobility within the system.

[Robert Kelly]

With respect to Air Canada itself, that is probably true. However, there are many other airlines within Canada, coming and going. I think within Canada there are approximately 980 airlines of various sizes.

[The Chair, Conservative, Candice Bergen]

Thank you very much.

Our time has expired.

Again, I want to thank the witnesses for being here and for their contribution.

I will suspend for two minutes while we bring in the new witnesses for the next hour.

Thank you.

[The Chair, Conservative, Candice Bergen]

We will resume our meeting. I'd like to ask everyone to please take their seats so we can resume.

We are going to begin with our witnesses. In the second hour we have representatives from the Canadian Human Rights Commission, David Langtry, the acting chief commissioner. Welcome, Mr. Langtry. We also have Philippe Dufresne, director and senior counsel from the Canadian Human Rights Commission.

We have representatives from Federally Regulated Employers-Transportation and Communications, known as FETCO. We'll call you FETCO, if that's all right.

[John Farrell, Executive Director, Federally Regulated Employers - Transportation and Communications (FETCO)]

That's okay.

[The Chair, Conservative, Candice Bergen]

Mr. Farrell is here, the executive director, and with him is Christopher Pigott. Welcome.

Each one of you, Mr. Langtry, will have seven minutes. Mr. Farrell will have seven minutes, and then we'll go to our questions.

I'll begin with you, Mr. Langtry, please.

[David Langtry, Acting Chief Commissioner, Canadian Human Rights Commission]

Thank you, Madam Chair, members of the standing committee.

Thank you for the opportunity to speak to the committee as you review Bill C-481. As the chair noted, with me is Mr. Philippe Dufresne, our Director of Litigation and Senior Counsel.

Requiring people to retire at a specified age is discrimination. The Canadian Human Rights Commission has called for repeal of the mandatory retirement provisions of the Canadian Human Rights Act since 1979, just one year after the commission opened its doors. Back in 1979, the commission's opinion was held by a minority. As recently as the 1990s, the Supreme Court ruled that although mandatory retirement was discriminatory, it was a permissible limit under the Canadian Charter of Rights and Freedoms.

The commission is aware of the rationale of the court at that time. Job progression, safety and pensions were, and still are, important. However, the commission maintains that these can be accommodated without perpetuating a discriminatory practice.

All Canadian jurisdictions, with the exception of the federal jurisdiction and, in a limited way, New Brunswick, have abolished mandatory retirement. Over the years, many federally regulated employers in the federal public service abolished it on their own initiative.

There is no evidence of any significant detrimental impact on employers, pensions, safety, or job progression.

Turning 65, or any other age, does not make someone less qualified to work. In our view, the qualifications of the person measured against the requirements of a job should be the relevant criteria in determining whether someone should be employed.

There are legitimate concerns about the impact of abolishing mandatory retirement in safety-sensitive occupations. Some may ask whether a 75-year-old pilot should be flying a plane. I suggest that this is the wrong question. The real question is whether the pilot is fit to fly the plane. The ability of a pilot may be impacted by a variety of factors unrelated to age, such as lack of sleep, stress, or medical conditions.

From a human rights perspective, what is required is an individualized assessment aimed at determining the ability of individuals to perform the requirements of their job. This should apply regardless of a person's age.

In some circumstances, a job requirement based on a prohibited ground of discrimination may be essential to the performance of the job. The Canadian Human Rights Act provides for the defence of a bona fide occupational requirement, or BFOR , in these cases. For example, bus drivers are required to have good vision. Although this requirement discriminates against people who are visually impaired, it is an acceptable form of discrimination in this occupation.

The act sets out that an employer seeking to prove a BFOR must also be able to show that accommodating people who do not meet the job requirement would impose an undue hardship, taking into consideration cost, health, and safety. As a result, should Bill C-481 be enacted, an upper age limit in specific job situations could be considered non-discriminatory if an employer is able to argue a BFOR.

You, of course, have already heard about the Air Canada pilots cases from the previous witnesses. The cases illustrate how a BFOR works. The Federal Court upheld the Canadian Human Rights Tribunal's finding that the mandatory retirement defence in the Canadian Human Rights Act was inconsistent with the charter. At the same time, the Federal Court sent the case back to the tribunal for a re-determination of whether Air Canada's age requirement was a bona fide occupational requirement for its pilots.

It is important to mention that mandatory retirement is not just about age. It has a disproportionate impact on certain groups in Canadian society. For example, women who have accumulated fewer years of work, or delayed their higher education due to child rearing, are particularly disadvantaged by mandatory retirement. Likewise, new Canadians and people with disabilities may be more disadvantaged by being forced to retire.

These were among the factors considered by the Federal Court in the Air Canada case, and were cited as elements in support of the Court's conclusion that the mandatory retirement defence in the Canadian Human Rights Act is not justified.

The commission supports this bill, and we thank you for the opportunity to be here to express that support.

We would be pleased to answer any questions you may have.

[The Chair, Conservative, Candice Bergen]

Thank you very much, Mr. Langtry.

We'll now go to Mr. Farrell, for seven minutes, please.

[John Farrell]

Thank you, Madam Chair.

FETCO represents approximately 586,000 employees in the federal jurisdiction.

First and foremost, FETCO members support the principle of removing the provision in the Canadian Human Rights Act that permits mandatory retirement. The time has come. The provinces have adopted this principle in their human rights legislation and regulations. Indeed, most companies in the federal jurisdiction that are members of FETCO have already adopted the principle that employees may work beyond age 65.

We are here today fundamentally to assist the Government of Canada in crafting new legislation and regulations that will address the complexities of changing from the current regime to a new regime. Our objective here is to end up with better legislation that will stand the test of time and address issues appropriately.

The federal sector includes interprovincial and international transport undertakings such as airlines, air traffic control, shipping, railways, and trucking, in which the nature of work performed raises concerns regarding significant risks to public safety.

Repealing the provisions of the Canadian Human Rights Act that allow mandatory retirement will remove an important mechanism that has been available to federal employers to manage some older workers with dignity with regard to diminishing performance resulting from advancing age. The management challenges presented by older workers, particularly in safety-sensitive workplaces, will remain and cannot simply be ignored. FETCO is concerned that Bill C-481 fails to provide any guidance or assistance to employers in respect of these significant management challenges.

We are suggesting two policy options. First, employers should be permitted to apply reasonable mandatory retirement ages in certain circumstances and only in specific occupations where the performance of work is associated with a high risk to public safety and the safety of other workers.

Second, a provision should be included in the CHRA that stipulates that it is not a discriminatory practice on the basis of age for an employer to impose periodic skills and competency testing on employees in safety-sensitive positions after they have reached a certain age.

This targeted approach would reduce a potentially significant burden on employers and would not interfere with employees' equality rights. Indeed, in some industries, such as the trucking industries, medical examinations for drivers over age 65 are required on an annual basis. We heard earlier that there are specific arrangements that are required in the airline industry.

Now we want to address issues with respect to the effect of removal of mandatory retirement on pensions and benefit plans.

Regarding pensions, Bill C-481 does not address how the elimination of mandatory retirement will be reconciled with pension plans that are designed to be integrated with the Canada Pension Plan, a practical problem we have to deal with.

Bill C-481 does not contemplate how the elimination of mandatory retirement will affect the ongoing transition in many workplaces to systems of phased retirement that allow employees to access earned pension benefits while they also continue to accrue pension benefits as a result of a change in employment status.

Turning to benefits now, Bill C-481 fails to address how benefits and insurance programs will be treated if mandatory retirement policies are prohibited. Various provinces, such as British Columbia, Alberta, Saskatchewan, New Brunswick, and Nova Scotia, have enacted specific exceptions that allow employers to continue to differentiate between employees on the basis of age in the administration of employee pensions, benefits, and insurance plans.

These legislative exceptions address the legitimate concerns of employers that the cost of financing certain employee benefits and/or insurance plans will increase in respect of older employees who choose to continue working beyond the so-called normal retirement age.

It is FETCO's position that Parliament must address the similar legitimate concerns of employers in the federal jurisdiction regarding benefits such as life insurance and extended health care, for which costs increase substantially with age, and disability benefits, for which costs increase dramatically as a result of increases in the duration of benefit and the frequency of claims.

FETCO notes that, in its current form, Bill C-481 will impact the Canadian human rights benefit regulations.

We must say that if you take a look at those regulations as they currently exist, they apply to a different regime, which is going away. So there is a great deal of work that needs to be done by the Government of Canada to consider rewriting regulations that will suit new legislation, and we employers want to be part of that process so that we end up with proper regulations that will stand the test of time.

Finally, removal of mandatory retirement could materially affect federal employers' costs of workers compensation benefits, which is another problem. These benefits are administered by the provinces on behalf of federally regulated employers. There is no doubt that as employees get older, the cost of workers compensation benefits will increase. The probability of injury will increase, and the probability that an employee will not be able to return to work and recover from an injury, because he or she is older, will increase. We have to find a way to balance increasing age with workers compensation regimes managed by the provinces. It's a very real, practical problem.

With respect to severance pay, FETCO is concerned that Bill C-481 adds unnecessary ambiguity to the severance provisions of the Canada Labour Code. We're not satisfied that the way you're dealing with this provision is technically clear enough to prevent problems from occurring.

First, section 235 of the Canada Labour Code should make it clear that any employee who voluntarily decides to retire and thereby terminates the employment relationship is not entitled to statutory severance. The existing provisions don't necessarily allow people to see that immediately.

Second, FETCO believes that federal employers should be entitled to continue to impose reasonable mandatory retirement ages where there is a significant risk to public safety arising from a particular occupation. In cases where a legitimate mandatory retirement age is in place and an employee retires with pension benefits upon reaching that age, FETCO's position is that the employer should continue to be relieved of the statutory severance obligation.

What are our conclusions? FETCO supports the Government of Canada's initiative, but it needs to be accompanied by legislative exceptions that continue to allow reasonable age-based retirement policies in some limited circumstances. Specifically, and further, FETCO—

[The Chair, Conservative, Candice Bergen]

I'm sorry, sir, but your time is up. Could you quickly wrap those recommendations up? Thank you.