Written by Daniel Standing LL.B., Editor, First Reference Inc.
In many cases, the choice of when to retire is based on a variety of factors, including lifestyle, priorities and other circumstances. Sometimes the decision to stop working is an easy one, while others prefer to continue working as long as possible. But what happens when an employee’s retirement is not a choice but is a requirement of his or her pension plan? Is it discriminatory? This issue came before the Human Rights Tribunal of Alberta in Aziz v Calgary Firefighters Association, 2020 AHRC 40 when a firefighter nearing the mandatory retirement age in his pension plan challenged the rules requiring him to retire based on his age.
The complainant, Paul Aziz, was a 59-year-old Calgary firefighter with 15 years of service who claimed to be in good physical condition and wanted to continue working past his 60th birthday. His collective agreement incorporated provisions of a firefighter’s pension plan which required him to retire at age 60. Mr. Aziz filed a human rights complaint alleging that his mandatory retirement amounted to discrimination in the area of employment, and membership in a trade union (contrary to sections 7 and 9, respectively, of the Alberta Human Rights Act) on the basis of age. In response, the City of Calgary and the union argued that the mandatory retirement provision was a bona fide occupational requirement (“BFOR”) based on the physical demands of the job, and to ensure the employees’ and the public’s safety. The respondents also argued that the pension plan was “bona fide” within the meaning of s.7(2). That section provided an exception to the general rule against discrimination in employment on the basis of age: The general rule “does not affect the operation of any bona fide retirement or pension plan […]”. The Tribunal’s decision addressed the respondents’ request that the complaint be dismissed on the basis that there was no prospect of success.
The respondents relied on a 2008 Supreme Court of Canada decision, New Brunswick (Human Rights Commission) v Potash Corporation of Saskatchewan Inc. (“Potash”) which considered an exemption clause similar to the one at issue in this case. It argued that there was no question the pension plan was a “bona fide” plan within the meaning of s.7(2), and it represented a complete defence to the complaint against both the employer and union. Relying on a variety of decisions both pre- and post-Potash, the complainant’s interpretation of a “bona fide” pension plan aligned more closely with the view of the minority in Potash.
The tribunal’s analysis and decision
The Tribunal began its analysis in recognition of the long history of challenges to mandatory retirement for firefighters in Canadian jurisprudence. A central decision in this debate is the Potash case, in which the Supreme Court interpreted the words “bona fide” in sections 3(5) and 3(6) of the New Brunswick Human Rights Act. In that legislation, the provisions banning discrimination on the basis of age did not apply to “the termination of employment or a refusal to employ because of the terms or conditions of any bona fide retirement or pension plan.”
The majority of the Supreme Court in Potash rejected the suggestion that a respondent had to satisfy the individualized three-part “bona fide occupational requirement” analysis (as set out in the Meiorin case) in order to justify the age restriction. Instead, it held that the exemption clause would operate if a respondent could show that the pension plan, taken as a whole, is “…a legitimate plan, adopted in good faith and not for the purpose of defeating protected rights.” The minority, in that case, held that to fall within the exception, the employer must be able to justify the mandatory retirement: it must show “rational connection with a workplace goal, honest adoption of the limit, and reasonableness.”
The Tribunal noted that the majority reasoning in Potash was followed in Alberta, Nova Scotia and British Columbia. In reliance on the minority position in Potash, the respondents pointed to the Nilsson decision (Nilsson v The University of Prince Edward Island) of a Human Rights Panel appointed under Prince Edward Island’s Human Rights Act. The panel in Nilsson distinguished the exemption provision in that case from the one in Potash, citing authority referring to the one from New Brunswick as being “absolutely unique.” The provision at issue in Nilsson was found to more similar to those considered in several British Columbia and Manitoba decisions. In one of those decisions, the age restriction had to be justified on the basis that it was necessary for the financial and actuarial sustainability of the pension plan. Likewise, the panel in Nilsson required the employer to establish why the mandatory retirement provision was justified, in line with the minority opinion in Potash. Finally, the Tribunal referred to obiter dicta of Justice LaForest in a 1990 decision of the Supreme Court in Harrison which appeared to clash with the majority view in Potash.
After distilling these disparate perspectives, the Tribunal stated that there was no factual or legal basis for departing from the majority view in Potash. The Tribunal stated that the complainant urged it to “step back” from Potash “without providing a route to that end.”
Applying the law to the facts, the Tribunal determined that the pension plan was bona fide within the meaning of s.7(2) of the Alberta Human Rights Act. This finding was supported by the plan’s longevity, having been established and registered in 1974. It was a registered defined benefit pension plan, subject to the supervision of the Alberta Superintendent of Pensions. It was jointly administered by the City of Calgary and the union.
This being the case, the Tribunal ruled that the bona fide pension plan constituted a complete defence to the claim of age discrimination as against the city. It declined to make the same ruling in favour of the union, however, and requested further facts and submissions on the matter before addressing that question.
This case illustrates the powerful effect that a bona fide pension plan in Alberta can have on the retirement age of its members. It must be noted that the result in this case was directly linked to an interpretation of the Alberta Human Rights Act, whose age discrimination exemption was similar to that of New Brunswick when it was considered by the Supreme Court. While the result may seem unfair at an individual level, the highest court in Canada has confirmed that the analysis is to be done by looking at the pension plan as a whole: As long as it is legitimate and not a sham, it will be considered valid and bona fide. As a result, Mr. Aziz, as a healthy sexagenarian, was out of work. If this case had occurred outside of the pension plan context, the result may well have been quite different, given the prohibition on age-based discrimination that would have applied.