Can Employers in Ontario, Canada Set a Mandatory Retirement Age?

Age Discrimination | Cutting off benefits at 65

Authored by: Soniya Ponniah 

Contrary to general belief, there is no law that permitted mandatory (e.g. forced) retirement at age 65. However, companies previously had mandatory retirement policies doing just that. Recent news that former United States Vice President Al Gore, aged 75, is resigning from Apple’s board due to the company’s age-based restrictions for directors has ignited discussions surrounding mandatory retirement ages in Canada and its implications for employees. This prompts an exploration of the Canadian legal landscape on the issue of retirement age and long-term disability (“LTD”) entitlements.

Mandatory Retirement Ages in Canada 

In Canada, there is no overarching mandatory retirement age. The Ontario Human Rights Code (the “Code”) safeguards against age-based discrimination in the workplace. Employers are explicitly prohibited from terminating or discriminating against employees solely based on age, including imposing arbitrary retirement ages. Should an employer contemplate imposing a mandatory retirement age, they must demonstrate that it is a bona fide occupational requirement.

Freedom to Choose Retirement in Canada

Unlike the United States, since 2009, Canadian employees have been afforded the autonomy to determine when they want to retire. This departure from age-based restrictions emphasizes a commitment to individual choice. Employers are encouraged to establish policies that support employees in making informed decisions regarding retirement, fostering a workplace culture that respects the workforce’s diverse needs. 

Age and LTD Entitlements 

Long-term disability benefits are designed to provide financial support to individuals who are unable to work due to illness or injury. However, many provincial regulations, including Ontario’s Employment Standards Act, 2000 (“ESA”) stipulate that these benefits cease once the policyholder turns the age of 65. This arbitrary termination of benefits raises questions about the fairness and practicality of such policies, especially in light of the increasing number of individuals choosing to extend their careers beyond the traditional retirement age. 

While many insurance policies have a cut-off age of 65, it does not mean that challenges cannot be made to argue that people over the age of 65 should be entitled to their LTD benefits. The overarching question to continuously consider is whether such provisions can withstand scrutiny under human rights legislation. Courts are repeatedly assessing whether these age-related exclusions are a reasonable and justifiable limit on the right to be free from discrimination based on age. 

Employment Lawyers

The mandatory retirement issue remains a perennial topic both in Canada and south of the border. It underlines the need to reflect on the legal intricacies of retirement age and LTD entitlements in Canada. 

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