Madam Speaker, it is a pleasure to speak in complete and full support of Bill C-219, an act to amend the Canada Labour Code, severance pay, put forward by the member for Swift Current-Maple Creek-Assiniboia.
I applaud the member for bringing this matter forward. As he has already mentioned, the bill is a direct result of his responding to his constituents, the purpose of private members' business. This is a non-partisan hour.
I have presented and debated many private members' bills in the House of Commons, some successful and others not. It is an important part of our work as representatives of the people. This bill is an important step forward in amending the Canada Labour Code which, at first glance at section 235, is full of age discrimination.
The Canada Labour Code, which should be leading the way in terms of work and labour force, is the only piece of legislation in the country that denies severance or termination pay based on an employee's eligibility for a pension. This is an inequity that must be addressed, and Bill C-219 does that.
Company pension plans, RRSPs and the Canada pension plan are all part of retirement. They are becoming increasingly important in the tough times ahead. According to Statistics Canada, 65 is the normal retirement age and 55 is when most people are eligible for early retirement.
As well, a reduced pension is the norm for early retirement. Even if an employee is not a member of a company sponsored registered retirement plan, severance could be denied at age 60 because they could receive Canada pension.
Some will say section 235 is there to disallow a double benefit, but comparing severance to pension is like comparing soya beans and apples. It is not a double benefit in my opinion. Supposedly the charter of rights and Freedoms guarantees freedom from discrimination based on age.
As we all know, demographically the population is getting older. Employers aged 55 and older could be targeted for layoffs to save companies money.
Bill C-219 comes at an important time. Termination of employment is now of considerable magnitude, especially when the economy is not as buoyant as it could be. Basically, an employer can terminate an employee whenever he or she feels like it. There is nothing in Canada that guarantees anyone the right to work.
What an employer is required to do is provide the employee with a reasonable notice of termination or payment equal to what the employee would have earned had they worked for the notice period, referred to as either pay in lieu of notice or termination pay, and any other money such as vacation pay which is owed to the employee at the time of termination.
The federal jurisdiction and Ontario are the only two in Canada that make statutory provisions for severance pay in addition to notice of termination requirements. Therefore in all other jurisdictions an employer may terminate an employee's service forthwith if the employer pays the employee an amount equal to the wages the employee would have earned in regular work hours for the period required by the notice provisions.
The purpose of Bill C-219 is to remove from part III of the Canada Labour Code section 235, which denies severance pay to employees. Passage of this bill would end an injustice and would end the age discrimination which is enshrined in the Canada Labour Code.
I have had similar situations with constituents in the past who offered the examples cited by workers in the riding of Swift Current-Maple Creek-Assiniboia.
As the hon. member has outlined very clearly, in 1993 Motorways Limited, an interprovincial trucking firm, closed its Canada-wide operation. Employees under the age of 55 on the closing date received two days severance pay for each year of service. However employees who were 55 years of age or over did not, regardless of their years of service. This to me was a flagrant injustice to people who had worked hard. Motorways was allowed to deny its former employees age 55 or older their severance because part III of the labour code, section 235(b) states:
An employer shall be deemed not to have terminated the employment of an employee, where, either immediately on ceasing to be employed by the employer, or before that time, the employee is entitled to a pension under a pension plan contributed to by the employer-
In practice this means very clearly that if a company is laying off workers it is not obligated to pay severance to those who are 55 years of age or older because those employees are entitled to early withdrawal of pension benefits even though they could be severely penalized for taking benefits before age 65.
The employees of Motorways filed appeals under the Canada Labour Code. In September 1995 the appointed appeals referee cited section 235 and ruled in favour of the company. He stated:
The purpose of this legislation appears to be to prevent an individual from receiving a double benefit; that is, severance pay and a pension. The text of the legislation is simply whether the appellants were entitled to receive a pension. They were. Accordingly, I confirm the decisions of the inspector and dismiss the appeals.
After losing the appeal, the hon. member's constituent took his pension at age 60, which meant a 5 per cent reduction. He gets $487 a month and he feels cheated out of the $6,872.32 he would have received had he been three years younger. We must make sure that this injustice does not happen again.
During the appeal process, the decision to deny stated that a pension and severance pay are double benefits. This is a misnomer. Severance and termination pay are a statutory benefit. The details are regulated by law for all employers within a specified jurisdiction. Hon. members will be aware that a pension is a negotiated benefit. The details are part of an overall benefits package and can vary widely from industry to industry, employer to employer and even job to job.