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Is it Age Discrimination to Propose that the Oldest Worker Take Early Retirement to Avoid Layoff of Younger Worker?

Since the abolishment of mandatory retirement in Ontario, issues sometimes arise about the treatment of “older” workers.  In a regime of mandatory retirement, employers could plan for the end of an employee’s employment at a very specific date.  However, now that mandatory retirement is illegal, life is more difficult for employers who want to terminate the employment of a older worker.  The dismissal cannot be related to the person’s age.

In a recent decision of the Tribunal called Watson v. C.A.W., the employer (who was the Canadian Auto Workers) decided it needed to downsize its administration by one position, from three employees to two.  It began by offering an early retirement to Watson, who at age 61 was the oldest of the three workers, but ranked second in seniority.   Watson declined the offer, so the employer laid-off the most junior employee as it was entitled to do under the collective agreement.  Afterwards, Watson claimed that she felt responsible for the lay-off and felt pressure to accept the early retirement package.  She also claimed she suffered harassment from the employer after refusing the early retirement.  She informed the employer she would accept an early retirement package, and she left her employment.   She then filed the human rights complaint, alleging that the employer discriminated against her on the basis of age when it offered only her a retirement package, and not the other workers, and when it engaged in harassment of her after she refused to accept the package.

The Tribunal dismissed her complaint.  It ruled that there is nothing unlawful about an employer offering a worker an early retirement package, provided the employee has the option of refusing it:

An employer does not discriminate on the basis of age simply because it makes available early retirement incentives for its employees. See Riddell v. IBM Canada, 2009 HRTO 1454 (CanLII)

In this case, the employer had offered early retirement only to Watson because she was the only one of the three employees who at that time was eligible for pension benefits.  The Tribunal accepted this explanation. Moreover, the Tribunal rejected the allegations of harassment.   Watson had argued that discipline she received for being late was related to her refusal to agree to the retirement package.  The Tribunal responded that the Code does prohibit employers from applying its normal disciplinary standards to “older workers”:

The Code does not prohibit an employer from applying its performance management policies and practices to older workers. Actions or standards that are arbitrary or that depart from standard policy or practice may raise an inference that a prohibited ground was a factor in how the employee was treated. However, the issue is whether the employee was subjected to differential or negative treatment, at least in part, because of a prohibited ground.

In this case, there is no basis in the evidence I have heard for finding that the employer’s actions with respect to the discipline imposed and the subsequent scheduling, hours of work and vacation entitlement disputes amounted to age discrimination or harassment.

In the end, therefore, the complaint was dismissed because the Tribunal did not find any age discrimination.  Do you think the outcome would have been different if all three of the employees in the group had been eligible for early retirement, but the offer was only made to the oldest of the three?

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3 Responses to Is it Age Discrimination to Propose that the Oldest Worker Take Early Retirement to Avoid Layoff of Younger Worker?

  1. Jim Reid Reply

    March 23, 2011 at 4:05 pm

    I presented the above mentioned case at Tribunal and in answer to your question, if all employees had been eligible for early retirement we would have offered it to the employee who had the most seniority first regardless of her age.

  2. Brian Reply

    April 8, 2012 at 10:14 am

    Hello

    I am 57 years old and a Technical Support person at IBM. I was informed last week that I was being retired and a severence was offered. That severence is dependent on my signing the agreement to not pursue any action. There are jobs posted at IBM that fit my qualifications and my job performance has been good. I was told I would not qualify for any posted positions due to the severence being offered and my “declining performance”. I have always had a “solid exceeds” rating but, convieniently, IBM saw fit to give me a “meets” rating just prior to this job action. Still, that rating, according to their own hr policies, is only an issue when two successive “meets” ratings are given. I believe I am being targetted because of my age. Are there grounds for legal action against IBM?

    • Doorey Reply

      April 9, 2012 at 9:32 am

      Brian, there may be a human rights issue. You should contact a lawyer who does human rights law. If you want some names, send me an email.

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