Tuesday, April 2, 2013

Supreme Court Refuses to Hear Mandatory Retirement Appeal

There have been some cases working their way through the Federal system, involving Air Canada pilots challenging their mandatory retirement provisions (requiring them to retire at age 60).  These cases have a lengthy procedural history, but involve complaints filed to the Canadian Human Rights Commission in 2004 and 2006, respectively.

The Federal Court ruled largely in favour of the pilots, but last year the Federal Court of Appeal allowed Air Canada's appeal, with the effect that the pilots' complaints will be unsuccessful.  They sought leave to appeal to the Supreme Court of Canada, but the SCC recently dismissed the application for leave.  As is the SCC's practice, no reasons were given for the refusal.

Because of the rationale for the Federal Court of Appeal's decision, which essentially held that the question was decided by a 1990 Supreme Court decision, I was rather hoping that the SCC would weigh in on the question.  Indeed, the FCA virtually invited the Supreme Court to do so.

The Issue

First, let's understand the framework:  The Canadian Human Rights Act includes an exception, s.15(1)(c), permitting mandatory retirement at the 'normal age of retirement for employees working in positions similar to the position of the individual'.  Thus, on a strict read of the CHRA, a mandatory retirement complaint has to fail in most circumstances.  So, to have a chance of succeeding, the pilots needed to make a constitutional argument, arguing that s.15(1)(c) of the CHRA violates s.15 of the Charter of Rights and Freedoms.

If that argument is made out, then the provision can be saved only if it meets the "Oakes" test, for reasonable limits under s.1 of the Charter.

A similar question went to the Supreme Court in 1990, in McKinney v. University of Guelph.  At the time, Ontario's Human Rights Code included an age discrimination exception, permitting age discrimination against people under 18 and over 65.  (Since then, the 'over 65' cap has been removed.)  University professors challenged the cap, among other things.  In a complex split decision by the Court, the majority determined that the cap, while discriminatory, was justifiable under s.1 of the Charter.

So the question addressed by the Federal Court of Appeal in the Air Canada case is this:  Is McKinney a binding precedent upon the Canadian Human Rights Tribunal?

The Federal Court of Appeal's Decision

The Federal Court of Appeal decided the case entirely on principles of stare decisis ("it stands decided"), which requires lower Courts (and, by extension, administrative tribunals), to follow binding decisions of higher Courts.

So, in essence, the FCA looked to what proposition of law McKinney stands for, namely, "that mandatory retirement, as an exception to the prohibition against discrimination on the basis of age, could be justified under s.1 of the Charter when it is a mutually advantageous arrangement between employers and employees which permits the workplace to be organized in a manner that accommodates the needs of both parties."

The logic, in essence, is that mandatory retirement has effects for employees throughout the workforce, not just at retirement age.  It has a broad effect on structuring of retirement packages, on security of tenure, and for work opportunities for others.  There's a bit of a subtext that the senior employees had advancement opportunities because of the prior generation being forced out, so now they should step aside and give the next generation those same opportunities.

As well, notwithstanding the FCAs observations to the contrary, there's a definite sense of the Supreme Court's decision in McKinney as preserving a large-scale status quo at the time.

The Federal Court of Appeal doesn't apply its own Oakes analysis.  It basically concludes that there's no principled basis on which to distinguish this case from McKinney, so the question stands decided, and there's no need to apply a fresh analysis.

My Thoughts

I really liked the Federal Court's analysis, looking at difference in the legislative contexts of the Ontario Code versus the Federal CHRA, and evolution in public policy since McKinney, and a more developed factual record.

The FCA liked the Federal Court's analysis, too, calling a "lucid and well-written" analysis that the Supreme Court could use to revisit McKinney if it chose to do so.

The reason I like that elaborate analysis is this:  McKinney was decided on the basis of a society where mandatory retirement was the norm - most people were subject to mandatory retirement, and there was a move towards earlier retirement.  There was no stigma associated with being forcibly retired at 65...because almost everyone was.  It was an integral structure to the workplace at the time, and the Code's cap on age discrimination protection was created for that reason.

The fact that the legislature has since removed the age 65 cap from the Code...speaks volumes to the social changes since then.

Now, with the decline of single-employer careers and premium pension plans, the viability of retirement at age 65 is becoming increasingly questioned.  Individuals can't afford to do so.  CPP benefits are being restructured to encourage later retirement.  OAS is no longer going to be available until age 67.  While the impact of these cases will be pretty limited in scenarios without decent pension plans, the truth is that the social underpinning that justified permitting mandatory retirement has changed significantly.  In my mind, that alone is sufficient to distinguish McKinney.  It is a fundamental principle of our constitution that it evolves and changes over time, and while stare decisis is an important principle, it nonetheless has to be open to lower courts to review whether or not the policy rationale for old case law has changed.

Indeed, one need not conclude that McKinney was wrongly decided at the time to determine that it is no longer good law:  If, as the FCA suggested, the Supreme Court took on the case, reviewed McKinney, and decided that it should no longer be followed because of changing social circumstances, then the conclusion would have been framed that the Federal Court of Appeal "erred" by following McKinney.

However, with the Supreme Court refusing to hear the case, it seems likely that McKinney will long stand as standing for the proposition that legislative provisions permitting mandatory retirement, within reason, are constitutionally valid.


All the above being said, the effect will be narrow, limited (in Ontario) to Federally-regulated employees, subject to mandatory retirement clauses, with nice pensions available to them.  The discourse in Ontario has largely moved from there, to questions as to whether or not there is a BFOR for mandatory retirement in specific contexts.  I don't even think that this case will dispose of the inevitable constitutional challenge to Ontario's new Mandatory Mandatory Retirement clauses for firefighters - it is a major distinguishing factor that the legislative provisions in McKinney and this Air Canada case are permissive, not mandatory; that they permit, without obliging, parties to agree on a mandatory retirement date.

And, on the up side, the Federal Court of Appeal was not impressed by the CHRT's failure to consider whether or not it was bound by McKinney.  This is a common problem:  Administrative tribunals often look at other cases, even from higher courts, as being persuasive, if that, without really affecting their own discretion as to how to decide cases.  (I have heard of cases where the Landlord Tenant Board, when presented with a Supreme Court decision, responded, "I'm not bound by that.")  This may be a useful precedent for highlighting the importance of stare decisis at administrative tribunals.


This blog is not intended to and does not provide legal advice to any person in respect of any particular legal issue, and does not create a solicitor-client relationship with any readers, but rather provides general legal information. If you have a legal issue or possible legal issue, contact a lawyer.

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