Mr. Speaker, I am pleased to have this opportunity to debate Bill C-481, which was introduced by the hon. member for Laval—Les Îles.
The proposed legislation seeks to amend the Canada Labour Code and the Canadian Human Rights Act to prohibit federally-regulated employers from setting a mandatory retirement age.
I believe there is a lot of merit in pursuing what is proposed in Bill C-481. Specifically, I would support the elimination of exceptions set out in the Canadian Human Rights Act that allow the setting of mandatory retirement ages. I would also be prepared to support the bill's proposal to amend the Canada Labour Code to remove the provision that denies employees' severance pay upon involuntary termination if they are entitled to a pension.
While I can support the intention of Bill C-481, there are a few flaws in the proposed legislation. I will outline the two amendments to Bill C-481 that would be required for me to fully support the bill.
First, the bill would need to maintain paragraph 15(1)(b) of the Canadian Human Rights Act. This section provides for minimum and maximum ages of employment to be set out in regulations that were made by the Governor in Council.
Second, a coming into force provision would be required to allow the employers the necessary timeframe to implement these changes.
I will fully explain the aspect of the bill that I would support.
Bill C-481 would amend the Canadian Human Rights Act to remove two blanket exceptions, as well as the regulation making power that provides defences for mandatory retirement. Those blanket exceptions apply either in cases where a union expels a member who has reached the normal retirement age or where an employee is forced to retire upon reaching the normal age of retirement for individuals in similar positions. Eliminating blanket exceptions for mandatory retirement, while allowing employers to continue to establish bona fide occupational requirements, is consistent with current legislative trends and employment practices.
All provinces and territories have already amended their human rights legislations to remove blanket exceptions for mandatory retirement. This bill would bring federal legislation in line with current provincial legislation on the matter. However, the possibility of defending mandatory retirement policies still remains if there is sufficient evidence to show that they are required for health or safety reasons.
The average age of retirement in Canada today is 62 and only about 10% of the population continues to work after 65. Therefore, mandatory retirement policies in the federal jurisdiction affect very few employees in practice. In fact, less than 2% of federally-regulated employers have a mandatory retirement policy and only about 10% of large employers with 100 employees or more have a mandatory retirement policy.
Also, I would like to correct some comments recently reported in the press. Employees of the federal public service are not required to retire at age 65. In fact, mandatory retirement was generally eliminated from the federal public service in 1986, allowing employees to continue working as long as they wish.
In addition, evidence is suggesting that several large employers may actually abolish the practice of mandatory retirement in the near future.
There are areas of exclusive federal jurisdiction, such as the Canadian Forces and interprovincial and international transportation activities, where there may be circumstances that warrant a mandatory retirement policy. Repealing paragraph 15 (1)(b) would pose a significant challenge to the Canadian Forces' operational capability, not to mention the efficient management of military personnel and cost containment. The Canadian Forces must maintain an active and ready force. It must be able to recruit within its ranks. Therefore, it requires a continuous flow of personnel to ensure appropriate experience and expertise throughout its ranks.
Moreover, managing an older workforce would require increased financial and personnel resources, which would be funded from a fixed envelope at the direct expense of other priorities. Therefore, the Canadian Forces needs to maintain its current mandatory retirement policy.
I will now turn to my next point, which is amending the severance provision in the Canada Labour Code. Currently, under the code, employees whose employment is involuntarily terminated are entitled to severance pay. However, an existing provision, paragraph 235(2)(b), denies severance pay to those eligible for pension benefits, whether that t is the Canada pension plan, OAS, old age security, or private pension.
This creates differences in how otherwise similar employees are treated regarding a work-related benefit. For example, an employee with 20 years of service whose employment is terminated a month after becoming entitled to a pension loses entitlement, while someone two months younger with the same service is entitled to 40 days severance pay. I believe this to be unfair. Therefore, I support repealing this provision.
Bill C-481 needs a coming into force provision. This would allow employers and unions to make adjustments to prepare for the elimination of mandatory retirement and would give them time to reconfigure any policies or benefit plans that would be affected. It would help determine whether existing age-related practices need to be defended as bona fide occupational requirements and would further assist in negotiations of new collective agreements that comply with the legislation.
Provinces and territories did put in similar transition periods when the elimination of mandatory retirement came to their books. Additionally, eliminating blanket exceptions for mandatory retirement could raise a low charter risk to the extent that it might substantially interfere with any current collective agreements. Discussions between the government and affected parties about the transition provision may reduce this risk even further.
Abolishing the practice of mandatory retirement within the federal jurisdiction would not only be advantageous for workers but it would also be beneficial for our economy. Canada is facing the challenges of an aging population. It is projected that the proportion of Canadians aged 65 or older will increase from 13% to roughly 25%. In addition, the ratio of pensioners to workers is expected to shrink from four workers for every retiree to two workers for every retiree, and all of this will happen by 2030.
Within that period of time, these massive demographic changes will mean added fiscal pressures on Canadians' ability to manage increasing health care and pension plan costs. Canada will need to retain its skilled, seasoned workers and make greater use of their talents for longer periods of time.
There is abundant evidence that suggests that older workers are actually more likely to remain in the workforce when organizations have human resources practices that accommodate their needs and preferences. In other words, if they feel valued, they will continue contributing to the prosperity and well-being of Canada.
Bill C-481 would establish greater fairness for older workers and values their contributions.