On April 25, 2007, the British Columbia Provincial Government introduced Bill 31, the Human Rights Code (Mandatory Retirement Elimination) Amendment Act, 2007, which will take effect on January 1, 2008. This change reflects the demographic reality that the number of British Columbians over the age of 65 in the next 25 years will double. Currently, the Human Rights Code prohibits age discrimination for individuals between the ages of 19 and 64. The amendment will extend that prohibition for individuals  aged 65  or older.  Practically, the amendment means  that any public or private sector employers currently requiring that their employees retire at age 65, will no longer be able to do so after January 1, 2008. The legislation will not be retroactive so employers will not have to re-hire employees who retire before the legislation comes into force.

Section 13 (3) (b) of the Human Rights Code, has also been amended so that it is clear that an employer can continue to  apply  different eligibility criteria on the basis of age for bona fide retirement, superannuation or pension plans, and other group or employee insurance plans whether they are self-funded by employers or whether they are provided by a third party insurer. Accordingly, this may mean that employees who continue to work past the age of 65 could lose workplace benefits such as long-term disability, medical and dental coverage and life insurance, if an employer’s plans currently cut off benefits at age 65, if employers choose not to change or renegotiate the terms of those plans accordingly.

Employer Strategies to Manage Human Resources after Mandatory Retirement Abolished

The delay in implementation of Bill 31 will allow employers more time to consider and implement strategies to deal with the consequences of the end of mandatory retirement. Examples of such employer strategies may include:

• There is a tendency for employers to ignore performance problems for those employees nearing retirement. Since employees will no longer be required to retire after January 1, 2008 it will become important to manage performance proactively. Consequently, employers should ensure that you have performance review policies, which are transparent and applicable to all employees, not just older employees (employers will not be able to selectively apply performance criteria).

• Obtain information from benefit carriers as to expected cost of benefit plans if benefits were to be extended to employees aged 65 or older, so as to determine whether it is affordable to extend all benefit plans to these employees, or if the benefit plans will have to be scaled back yet offered to all employees, or if benefits will not be offered to employees aged 65 or older. Review employer retirement plans for any age-related rules related to contributions and drawing of pension.

• Consider incentives such as retirement planning seminars to encourage employees to think about and make decisions regarding planned retirement dates, and to assist employers in planning their human resources requirements.

• Consider incentives to encourage retirement such as phased in retirement, financial bonuses, and offering certain benefits or other perquisites conditional on retirement.

• If your company is subject to one or more collective agreements, review the provisions of such agreements in light of these proposed changes (remembering that no one may contract out of any of the provisions of the Human Rights Code).

For further information regarding Bill 31 and the issues related to the end of mandatory retirement, please contact Nicole Byres, or any member of Clark Wilson LLP’s Labour & Employment Practice Group.