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. Ontario Nurses Association v. The University Health Network [mandatory retirement]
In Ontario Nurses Association v. The University Health Network (Div Ct, 2026) the Divisional Court dismissed the ONA's Charter JR, this brought against a labour arbitrator's finding that "the denial of long-term disability (“LTD”) benefits at age 65" violated Charter s.15 ['discrimination'] (this was agreed by the parties) but was saved by Charter s.1.
Here the court walks through the recent development of employment mandatory retirement law (especially human rights law) in Ontario:THE LEGISLATION AND ITS BACKGROUND
[5] Up until 2005, workers in Ontario were subject to a regime, known as mandatory retirement, under which employers could compel employees to retire at age 65. Under that regime, LTD benefits also terminated at age 65. The mandatory retirement regime operated by way of the Human Rights Code.[2] Although the Code as drafted at the time prohibited discrimination in employment on the basis of age, it defined “age” as eighteen years or more and less than sixty-five years.[3]
[6] In 2005, the Ontario Legislature passed the Ending Mandatory Retirement Statute Law Amendment Act[4] (“EMRSLAA”), which amended the general definition of “age” in the Code to mean “an age that is 18 years or more.” This effectively prohibited mandatory retirement from employment at any age.
[7] The EMRSLAA also amended the Code to provide in s. 25 (1) that the right to equal treatment under s. 5 is not infringed by, among other things, a benefit plan that complies with the Employment Standards Act, 2000 (the “ESA”) and the regulations under it. The regulations issued under that Act provide that, for the purposes of Part XIII of the Act which addresses benefit plans:“age” means any age of 18 years or more and less than 65 years;[5] [8] The effect of these changes was to end mandatory retirement but allow age-based distinctions to apply to benefit plans with respect to employees under age 18 or over age 64.
[9] The amendments reflected a balancing of interests which allowed employees to work past age 65, while simultaneously ensuring the continued viability of existing pension, benefit and early retirement rights. When introducing the EMRSLAA in the Legislature, the Minister of Labour explained:The intent of our bill is to end mandatory retirement in a way that is fair and balanced, and protect[s] existing entitlements to pension, early retirement and benefits ...
... the status quo would be maintained with respect to disability plans, life insurance plans and health benefits. Whether to offer these kinds of benefits has always been up to employers.[6] [10] The Premier further described the compromise as a “fair, reasonable and rational approach” to ending mandatory retirement while “protecting existing pension benefits and earlier retirement rights.”[7]
[11] At the same time, s. 44(1) of the ESA provides that no employer shall offer a benefit plan that treats people differently because of, among other things, age (i.e. age 18 or more and less than 65 by virtue of the Regulation). The effect of this is to require employers to maintain equal benefits for older workers under age 65, even where those benefits are more expensive than for younger employees. For instance, employers who provide life insurance benefits must pay higher premiums for the insurance of workers aged 50 to 64 than for younger workers. The ESA does not permit the employer to pay equal premiums and provide lower benefits to its older workers.
[12] The applicant submits that the combined effect of the above provisions of the ESA and the Code permits discrimination based on age, specifically age 65 and older, with respect to employment benefits. In their factums and in argument the parties also referred to this as the “carve-out”.
[13] The Applicant and the Respondent agreed before the Arbitrator that the objective of the carve-out within the Code, the ESA, and the Regulations that permitted discrimination on the basis of age at age 65 with respect to benefit plans, was to protect the viability of benefit plans.
....
[63] The Applicant submits that the deleterious effect of the carve-out is the complete removal of Code protections in respect of benefits for employees at age 65.
[64] In my view, that overstates the deleterious effect of the legislation. As the Arbitrator noted, the carve-out was introduced in tandem with the elimination of mandatory retirement. Before the elimination of mandatory retirement, the Code excluded employees 65 or older from any Code based protection in respect of employment.[66] The Supreme Court of Canada upheld that exclusion in McKinney v. University of Guelph.[67]
[65] In that context, the carve-out was not a denial of a prior right. The carve-out was part of a package that gave those 65 and over a new right, the right to continue in their jobs past age 65. The carve-out simply meant that the status quo with respect to LTD benefits before the abolition of mandatory retirement would continue afterward.
[66] The carve-out helped facilitate the abolition of mandatory retirement by avoiding one potentially significant cost associated with that reform: the extension of LTD benefits beyond age 64. Although employees over 64 did not gain an entitlement to LTD benefits, they did gain the right to continue working. Moreover, any adverse effect resulting from the denial of LTD benefits was mitigated by the availability of pension income. The negative consequence was further attenuated by the small number of nurses who work past 65.[68]
[67] The carve-out also reflects a policy preference for a clear default rule that applies to all employees in Ontario. That was a legitimate choice given that the cost of LTD benefits at 65 and older would depend on the circumstances of each workplace. A blanket default rule provided economic certainty for both employees and employers.
[68] Finally, if the circumstances of a particular workplace are such that LTD benefits after 65 are so desirable as to warrant overriding the default norm, nothing prevents parties from negotiating such benefits.
[69] No line drawing exercise is perfect. Different people will draw the line in different places. The mere possibility of different lines does not mean that any of them are disproportionate. Here the legislature drew a line that reflected a proportionate trade off in interests that resulted in employees gaining a net increase in rights. The fact that the net accretion of rights was not quite as large as the Applicant would have liked, does not make the result disproportionate. The entire case is useful reading for anyone involved in age-related employment benefit discrimination.
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