Age 65 retirement policy struck down by arbitrator

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Most employers are aware that, in matters of employment, Ontario’s Human Rights Code qualifies the general protection it provides against age discrimination by defining the word “age” to mean less than 65 years. This means that employees may be legally compelled to retire at age 65. What may not be as well known is that, if parties negotiate language in a collective agreement which provides more extensive protection than that contained in the Code, an age-based mandatory retirement policy may be ruled invalid.

This was the result in Ottawa Hunt and Golf Club v. Hospitality and Service Trades Union, Local 261, an arbitration decision released on October 12, 1996. In this case, the union grieved the forced retirement of two employees, and asked that the employer’s age 65 mandatory retirement policy be set aside.

The employer was newly-unionized, and had a long-standing policy of not requiring that employees retire at age 65. During the process of negotiating the first collective agreement, however, the employer adopted a mandatory retirement policy. The union was informed of the policy during negotiations, through the presentation of an “Employee Handbook” which set out the age 65 retirement policy.

Also contained in the Handbook, however, was a statement to the effect that, in any conflict between the Handbook and the collective agreement, the agreement would prevail. The collective agreement ultimately contained a provision which prohibited discrimination “by reason of age”, without any further qualification or definition.

In arguing that the grievance be dismissed, the employer pointed to the union’s knowledge during negotiations that management had established a new mandatory retirement policy. The term “age” in the collective agreement’s non-discrimination provision should therefore be interpreted with that policy in mind, it claimed.

The arbitrator ruled in favour of the union, holding that the term “age” in the collective agreement was not limited by the employer’s policy as set out in the Handbook. The very fact that the Handbook contained a passage providing that the collective agreement would prevail over it in the event of conflict showed that the parties were aware that such conflicts might occur. Therefore, the arbitrator stated, it was entirely plausible that the union believed it was negotiating a superior protection in the form of the non-discrimination clause and may not have felt the need to challenge the policy during bargaining.

The arbitrator also noted that, while the Human Rights Code can be used to interpret a collective agreement provision where conflict with the legislation would otherwise render the provision illegal, where, as in this case, the union’s interpretation would not result in any illegality, there was no reason to import the Code‘s restrictions on the term “age”.

Had the parties wanted to use the Code‘s definition of “age”, it would have been easy to do so. Since they did not, the arbitrator ruled, the word must be accorded its ordinary meaning, and the mandatory retirement policy set aside.

For more information on this subject, please contact Jacques A. Emond at (613) 563-7660, Extension 224.