Reversing an earlier decision, the Canadian Human Rights Tribunal has ruled that the provision in the Canadian Human Rights Act allowing mandatory retirement at the "normal age of retirement" is an unjustified breach of the Charter of Rights and Freedoms. As a result, the Tribunal refused to give effect to the mandatory retirement of Air Canada's pilots at age 60. Both the airline and the Air Canada Pilots Association have said that they will appeal the ruling.

The Facts:

The case arose when two Air Canada pilots who had been forced to retire at age 60, George Vilven and Robert Kelly, complained that this constituted discrimination in employment on the basis of age. Vilven, a First Officer on the Airbus 340 aircraft, was forced to retire in September 2003, while Kelly, the Captain of an Airbus 340, went into mandatory retirement in April 2005. Their forced retirements were in accordance with the mandatory retirement provisions of the collective agreement in effect between their union, the Air Canada Pilots' Association (ACPA), and Air Canada. In their complaints, both men sought reinstatement as active pilots.

The Arguments:

The pilots relied on section 3(1) of the Canadian Human Rights Act (CHRA), which prohibits discrimination based on, among other things, age, but Air Canada invoked s.15(1)(c) of the Act, which allows an exception in the case of age if "an individual's employment is terminated because that individual has reached the normal age of retirement for employees working in positions similar to the position of that individual."

In response, the pilots argued that the exception in the CHRA was invalidated by the guarantee of equality in the Charter of Rights and Freedoms. Section 15(1) of the Charter provides that "[e]very individual is equal before and under the law and has the right to the equal protection and equal benefit of the law without discrimination and, in particular, without discrimination based on race, national or ethnic origin, colour, religion, sex, age or mental or physical disability."

Judicial History:

Initially, the CHRT ruled that the provision in the Act allowing mandatory retirement did not violate the guarantee of equality rights in s.15 of the Charter, but the Federal Court disagreed. Left for decision was the question of whether the breach of the Charter was a "reasonable limit demonstrably justified in a free democratic society," as permitted by s.1 of the Charter.

The Decision:

In an August 28, 2009 decision, the Tribunal has ruled that it is not.

In this regard, the Tribunal held that Parliament's goal – allowing mandatory retirement to be negotiated in the workplace – was not sufficiently pressing and substantial to warrant the infringement of equality rights. It noted: "The experts who testified in the present case agreed that the link between mandatory retirement and the benefits that were traditionally associated with it is not as strong as it was once thought to be. There is no dispute that in jurisdictions that have abolished mandatory retirement, deferred compensation systems, seniority and other such socially beneficial systems have survived."

The Tribunal observed, as well, that "it is now clear that the workforce is aging and many individuals need and want to work past the mandatory retirement age. In light of this fact, it might be argued that preventing, rather than permitting age discrimination beyond the normal age of retirement has become a pressing and substantial need in society."  Also, mandatory retirement was not "rationally connected" to Parliament's objectives. To quote from the decision:

[O]ne anomaly of the "normal age of retirement" rule as noted by the Federal Court in Vilven, is that a dominant actor in the industry such as Air Canada, can set the mandatory retirement age for the entire industry. As a result, employees of smaller companies within the industry who have not negotiated mandatory retirement in exchange for wage and pension benefits may still be subject to the mandatory retirement age set by the dominant player in the industry. So, for example, Jazz Airlines could take advantage of the "normal age of retirement" set by Air Canada and impose mandatory retirement at age 60 upon its pilots.

And, most importantly, mandatory retirement was not a minimal impairment of equality rights since "[f]ar less intrusive options can be contemplated." The Tribunal stated:

For example, as is the case in other jurisdictions, one option would be to permit mandatory retirement arrangements that constitute a bona fide occupational requirement (BFOR) under ss. 15(1)(a) and 15(2) of the CHRA. …

Concerns about the application of the BFOR test to mandatory retirement have not hindered other jurisdictions both internationally and in Canada, from adopting this method of justifying mandatory retirement. In the majority of Canadian provinces – Alberta, Nova Scotia, New Brunswick, Prince Edward Island, Quebec, Manitoba and Ontario – mandatory retirement is not permitted unless it constitutes a bona fide occupational requirement. Similarly, in Australia, New Zealand and the United States mandatory retirement is only permitted if it is justified as a bona fide occupational requirement. …

The Tribunal found that "[f]ar less intrusive options can be contemplated:"

For example, as is the case in other jurisdictions, one option would be to permit mandatory retirement arrangements that constitute a bona fide occupational requirement (BFOR) under ss.15(1)(a) and 15(2) of the CHRA. …

Concerns about the application of the BFOR test to mandatory retirement have not hindered other jurisdictions both internationally and in Canada, from adopting this method of justifying mandatory retirement. In the majority of Canadian provinces – Alberta, Nova Scotia, New Brunswick, Prince Edward Island, Quebec, Manitoba and Ontario – mandatory retirement is not permitted unless it constitutes a bona fide occupational requirement. Similarly, in Australia, New Zealand and the United States mandatory retirement is only permitted if it is justified as a bona fide occupational requirement. …

Moreover, as the Tribunal found, "the negative effects of the infringement of depriving individuals of the protection of the Act outweigh the positive benefits associated with s.15(1)(c)."

The Tribunal stated:

[T]he evidence is clear that depriving people who are the normal age of retirement of protection under the CHRA produces significant deleterious effects. Both experts agreed that mandatory retirement arrangements are hard on people who need to work, for whatever reason, past the normal age of retirement. In particular, those who enter the workforce later in life or who have taken breaks from paid labour face considerable hardship when forced to retire. These workers do not have the time to amass significant pension benefits and may face a particular burden if they have to retire at a certain age. Professor Carmichael testified that this group is made up predominantly of women who have spent the early part of their career out of the labour force raising children, and immigrants who came to Canada as older adults. These individuals are thrust back out into the job market after they have been forced to retire.

As the Tribunal commented, "one of the most disturbing aspects of this provision was the one first noted by the Court in [the present case]: it allows employers to discriminate against their employees on the basis of age so long as that discrimination is pervasive in the industry."

Finally, the Tribunal concluded that the mandatory retirement policy at Air Canada breached the anti-discrimination provision of the CHRA since the company did not provide for accommodation, or establish that accommodating pilots above age 60 would impose undue hardship.

On this point, the Tribunal concluded: "The objections of younger pilots to accommodating older pilots are based on the view that younger pilots will not be able to enjoy the benefits of seniority if the older pilots are not forced to retire. This objection has not been established on the evidence…. In the circumstances of this case, insisting that the absolute preservation of a younger pilot's seniority takes precedence over the continued employment of his or her older colleagues amounts to making a purely age-based – and therefore arbitrary – value judgment about the relative worth to society of the work performed by each age group. And about the relative importance of employment to each age group."

Finding that "the complaints of Mr. Vilven and Mr. Kelly have been substantiated," the Tribunal deferred a decision on remedies pending a further hearing to consider evidence as to the implications of various options.

Both Air Canada and the pilots' union have said they are applying to the Federal Court of Canada for judicial review of the Tribunal's decision. The union said in a September 28 statement that most of its members favour retirement at 60 and that "[w]e believe the tribunal erred at law by ignoring Supreme Court of Canada decisions which found it acceptable for employers and employees to determine a retirement age through the collective bargaining process."

Comment:

While legislative provisions allowing mandatory retirement have been repealed in most jurisdictions in Canada, a number of jurisdictions maintain exceptions where age is a bona fide occupational qualification (as it is, for example, for firefighters), or where a bona fide pension plan exists. (See Lancaster's Pension and Benefit E-Bulletin, March 20, 2009, Issue No. 75.) The BFOQ exception is not likely to be challenged under the Charter, but it is likely only a matter of time before a Charter-based challenge is mounted against the bona fide pension plan exception.

Read the full text of the Canadian Human Rights Tribunal's decision in Vilven and Kelly v. Air Canada.