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Human Rights Tribunal of Ontario Rules that Exception Permitting Employers to Terminate Benefits of Workers Age 65 and Older is Unconstitutional

July 16, 2018

[vc_row][vc_column width=”1/4″][vc_single_image image=”3633″][/vc_column][vc_column width=”3/4″][vc_column_text]On May 18, 2018, the Human Rights Tribunal of Ontario (the “HRTO” or “Tribunal) released an important interim decision for Talos v Grand Erie District School Board (“Talos”). An interim decision is a decision on a particular point in a case made pending the final outcome of the case, and is not a final decision.

As a result of this decision, employers may face claims of discrimination when they terminate the benefits of workers age 65 and over due to their age.

Background

Despite the end of mandatory retirement in Ontario and statutory protections against age discrimination, there are still statutory exceptions that allow for the differential treatment of people based on their age in certain contexts. Mandatory retirement at age 65 has been prohibited in Ontario since 2006. Further, age has long been a protected ground under the Human Rights Code (the “Code”) and the Canadian Charter of Rights and Freedoms (the “Charter”) such that discrimination on the basis of age is generally prohibited. Nevertheless, section 25(2.1) of the Code, the Employment Standards Act (the “ESA”), and its regulations create an exception that permits employers to terminate the benefits of workers age 65 and older.

Talos v Grand Erie District School Board

Mr. Talos is a secondary school teacher employed by the Grand Erie District School Board (the “School Board”). The School Board discontinued Mr. Talos’s group health, dental, and life insurance benefits when he turned 65, even though he continued to work full-time. Consequently, Mr. Talos filed an application with the Tribunal alleging that the School Board had violated section 5.1 of the Code by discriminating against him in respect of his employment due to his age. The School Board argued that their termination of Mr. Talos’s benefits did not constitute discrimination contrary to the Code because it fell under the exception created by section 25(2.1) of the Code, the ESA, and its regulations. The HRTO issued a previous interim decision in 2013 in favour of the School Board, ruling that the Code does not prohibit the differential treatment of persons age 65 and over with respect to benefits plans due to their age. However, Mr. Talos subsequently challenged the constitutionality of section 25(2.1) of the Code and was permitted to proceed.

Mr. Talos argued that section 25(2.1) of the Code violated his right to equality under the Charter and is therefore unconstitutional. The Tribunal ruled that section 25(2.1) of the Code did violate Mr. Talos’s Charter right because its effect caused him to experience disadvantage due to his age. The Tribunal further held that this violation could not be justified under section 1 of the Charter because the impugned provisions do not minimally impair the rights of older workers, as constitutional law requires. As such, the HRTO ruled that the School Board cannot rely on section 25(2.1) as a defence to Mr. Talos’s discrimination claim. As a result, Mr. Talos’s original application will proceed to be decided on its merits.

Implications

This decision’s significance is evident because the Attorney General of Ontario and the Ontario Human Rights Commission, among others, served as intervenors. Most importantly, employers will very likely no longer be able to treat employees over the age of 65 differently with respect to employee benefits due to their age without risking human rights complaints of age discrimination. This will have serious implications for many employers because it is currently a common practice to discontinue or reduce employee benefits for workers over the age of 65. Furthermore, employers that choose to provide benefits to employees over the age of 65 in order to minimise the risk of a potential discrimination cost will incur substantial costs.

Another potential implication of Talos is that it may affect future decisions for claims under the Workplace Safety and Insurance Act (the “WSIA”) because the WSIA has similar exceptions to the one discussed above. For example, under the WSIA employers are not obligated to provide payments for loss of earning or re-employment to workers over the age of 65 that are injured at work. Thus, the HRTO’s decision in Talos, though it is not technically binding on courts or on the HRTO itself, may persuade the courts that these exceptions are also unconstitutional, which would greatly expand employers’ obligations under the WSIA to workers over the age of 65. Although Talos was an interim decision, and not the final decision disposing of the matter, the Tribunal’s decision regarding the constitutionality of s.25(2.1) is effectively final.

Nevertheless, there are a few caveats to consider which may limit the impact of Talos. First, it is important to note that the HRTO cannot issue a general declaration of invalidity for laws that it finds unconstitutional. As such, section 25(2.1) of the Code still technically has force and effect. Furthermore, if the Tribunal’s decision is subject to judicial review, the reviewing court may rule that section 25(2.1) is constitutional. Also, the HRTO’s decisions are not binding on itself. As a result, the HRTO is free to decide subsequent cases differently from Talos, and a different vice-chair may not consider section 25(2.1) of the Code to be unconstitutional, although this is unlikely as the Tribunal typically follows its own decisions. Further, this decision pertained specifically to group health, dental, and life insurance benefits, and did not consider other types of benefits such as long-term disability, pension, and superannuation. Finally, the Ontario government may seek to amend the Code in response to Talos by enacting new provisions that still allow for some differential treatment of workers over 65 with respect to benefits, but that would be upheld under section 1 of the Charter and therefore be constitutional.

In conclusion, employers should continue to watch this case very closely and would be well advised to consider whether they wish to mitigate risk by providing benefits to employees over the age of 65, despite the higher up front cost.

This blog is provided as information and a summary of workplace legal issues.

This information is not intended as legal advice.

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