Terminating Employee Benefits at age 65 in Ontario

Employee Benefits in Ontario – Termination of Benefits of Employees 65 Years and Older

In Talos v. Grand Erie District School Board, 2018 HRTO 680, which was released on May 18, 2018, the Ontario Human Rights Tribunal considered the impact of benefit plans that terminate at age 65.

The employee was a teacher who received health care benefits and life insurance throughout his career until he turned 65 years of age. Under the School Board’s plan, an employee who reached the age of 65 was no longer entitled to benefits. The Employment Standards Act, 2000 (the “ESA”) permits differentiation in employee benefit plans for employees over the age of 65. The Ontario Human Rights Code (the “Code”) section 25(2.1) permitted differential treatment with respect to employee benefits or pensions that comply with the ESA. The combination of these provisions meant that employers are permitted to provide benefit plans that exclude persons over 65.  The teacher filed a claim alleging that the employer’s benefit plan was discriminatory.

The Tribunal determined that the statutory provisions under the Code and ESA permitted the exclusion of benefits for persons over the age of 65. However, the Tribunal goes on to find that the exclusion of benefits was violation of the Charter of Rights of Freedoms (the “Charter”), and in particular, the right to equal treatment under the law as protected by section 15 of the Charter. In Canada, all statutory provisions must comply with the Charter. The law created a distinction between workers under the age of 65 who are members of the workplace and those who are 65 or older and do the same work. It also created a disadvantage as it deprived these same individuals of their benefits, and resulted in those individuals having loss of peace of mind, financial outlays, and being subjected to needs-tested processes in order to receive government support.

Despite the Charter breach, the provisions could still be saved under section 1 of the Charter if the limits were reasonable and justified. In this case, the Tribunal determined that there were less drastic measures other than the complete denial of benefits to those over the age of 65 that could accomplish the goals of the legislation which was stated to be flexible to employees and employers in these circumstances to negotiate different terms and conditions of employment.  As such, the provision could not be saved by section 1 of the Charter.

As a result, the provision is unconstitutional and cannot be relied on by employers to defend the termination of benefits to employees who reach the age of 65.  Employers should review their existing benefits plans to determine whether benefits plans provide for the termination of benefits at age 65.

We will keep you updated on any further developments surrounding this particular issue.