:
Good morning, everyone.
I would like to call our meeting to order.
We are beginning meeting number 43 of the Standing Committee on Human Resources, Skills and Social Development and the Status of Persons with Disabilities.
Our orders of the day are pursuant to the order of reference of Monday, December 6, 2010. We are studying Bill .
We are very pleased to have three witnesses with us today, two of whom are in the committee room with us. One witness is via video conference from Vancouver, B.C.
Today we are welcoming Mr. Robert Neil Kelly, who is part of Fly Past 60 Coalition, and George Vilven, who is also with the same organization.
Welcome, gentlemen.
We also welcome Jonathan Kesselman, a professor with the School of Public Policy at Simon Fraser University.
Thank you for being here as well, Professor.
Each one of you will have approximately seven minutes for a presentation. After all of your presentations are complete, we will then go to questions from the committee members.
We will begin today with Mr. Kelly. If you will begin, we'd love to hear from you.
:
Madam Chair, good morning.
I'm here to speak on behalf of the Fly Past 60 Coalition at the request Mr. Hall, who is unable to attend today.
The Fly Past 60 Coalition is a group that was formed by a segment of Air Canada pilots who oppose mandatory retirement. We're a group of 200 Air Canada pilots, past and present, who have joined together to pursue our mandatory retirement complaints.
We've achieved reinstatement of my employment by Air Canada by reason of an order of a tribunal issued November 8, 2010.
I was also directly involved in our second hearing, known as the Thwaites hearing, before the tribunal. That hearing involved 70 additional Air Canada pilot complainants and was held in October 2009 through January 2010. That decision is still pending.
That hearing dealt almost exclusively with the interpretation of the words in paragraph 15(1)(c) of the Canadian Human Rights Act, namely, “normal age of retirement for employees working in positions similar to the position of that individual”. I would like to offer the committee some candid observations on the current application of that paragraph, as expressed by the tribunal and by the Federal Court, with a view to putting the paragraph in context.
Our analytical starting point with respect to the statutory paragraph is, appropriately, the 1977 Standing Committee on Justice and Legal Affairs, which deliberated the insertion of paragraph 14(c), now paragraph 15(1)(c), into the act. Two pages from the parliamentary transcript of 1977 are appended to this submission.
The issue raised in that committee was whether what is now paragraph 15(1)(c) essentially condoned systemic discrimination. The issue was raised by Member Fairweather to the then deputy minister of justice, Mr. Barry Strayer, page 6:21 of the transcript, second page, at the bottom.
His answer was that permitting termination on the basis of age would not be a discriminatory practice as long as everyone else in that kind of employment was terminated at the same age. I make particular reference to his words “everyone else”, for these words appear to have been the key factor in reducing any opposition to the enactment of that potentially problematic provision.
Unfortunately, that qualification, “everyone else”, appears to have been totally forgotten. It never came before either the tribunal or the courts in any subsequent proceeding where the paragraph came into question until we raised the issue in the Thwaites hearing. Instead, both the tribunal and the superior courts, in a number of cases, independently deemed that the provision was intended to be interpreted instead by a statistical count of individuals doing similar work. In other words, the normal age of retirement was determined by not everyone else, or 100%, but by a simple majority of employees doing similar work.
In the judicial review of my 2007 tribunal hearing, the Federal Court denied that a violation of that paragraph had occurred because it found that Air Canada's pilots constituted approximately 54% of the total Canadian airline pilot population.
The Federal Court did express significant concerns with the wording of the paragraph, however, including the following.
One, the wording “individuals doing similar work” is uncertain, and, as a result, few employees are able to know in advance of their termination of employment who is included and who is not included in the classification. As a result, there is little certainty as to the normal age of retirement prior to an employee having his or her employment terminated.
Two, it is almost impossible for employees to determine the numbers doing similar work because individuals do not have access whatsoever to employment statistics of competing organizations. In the Thwaites proceeding, we actually had to issue subpoenas to over 30 different Canadian airlines to obtain their pilot employment statistics.
Three, dominant employers, such as Air Canada, are effectively able to set the norm and thus unilaterally determine the normal age of retirement by fiat, thereby usurping the role of Parliament.
Four, the Federal Court had difficulty accepting the concept that discrimination on the basis of age should be tolerated provided that the discrimination is applied against the majority of the employees. This proposition clearly offends the intent of the Canadian Human Rights Act and was not, in the opinion of the Federal Court, consistent with contemporary Canadian values.
The court suggested in its 2009 decision that the solution to this lay in the application of the charter and in the decision rendered by the same judge last week. That provision was found to offend the charter.
Five, in that decision the court identified one additional problem with the statutory provision, namely, that although the normal age of retirement may be determined by a free and collective bargaining between a dominant employer and its union, that normal age of retirement would then become applicable to employees of other companies who did not negotiate their age of retirement, including those employees in non-unionized companies.
As well, it is one thing to be accorded rights under the Canadian Human Rights Act; it's entirely another thing to actually realize them.
Despite the good intentions of Parliament in 1977 in allowing a limited exemption to the general prohibition against age discrimination for mandatory retirement, the reality is that it's almost impossible for the average Canadian to realize those rights when they're breached by powerful, litigious employers and unions.
It took over five years from the date when my employment was terminated for me to follow the due legal process to have my employment reinstated, and indeed, that legal battle is not yet ended, with Air Canada continuing to appeal the decisions of the tribunal and the court. Justice delayed is indeed justice denied, and the uncertain and inappropriate wording and restrictions of paragraph 15(1)(c) of the Canadian Human Rights Act, in our view, should be repealed so as to prevent denying other Canadians the ability to be free from age discrimination in their employment.
I would be more than happy to entertain your questions regarding my submissions.
Many thanks.
:
Good morning, Madam Chair and fellow committee members.
My name is George Vilven. I would like to thank you for allowing me to appear here to put a human face on what this bill is all about. Because of the time constraints, I will cover some of the major points but would encourage you to read my submission. I believe you will find it interesting how Air Canada and its pilots' union treat their employees and their fellow pilots.
When I started my complaint in the year 2003, I was told by the Canadian Human Rights Commission that it would take approximately a year and a half from start to finish. We are now going into the eighth year.
The union is telling its membership that this is far from over. It plans to appeal it to the Federal Court, to the Federal Court of Appeal, and on to the Supreme Court. Once again, the union is telling its members that this is far from over.
A large part of the Canadian population believes that mandatory retirement is no longer in existence. Yet it is alive and well in the federal labour code.
Here are some interesting facts. Air Canada is the only airline in Canada that does not allow its pilots to fly past the age of 60. WestJet, Air Transat, and Skyservice all allow their pilots to fly past the age of 60, and some allow it beyond the age of 65. All 45,000 American airline pilots.... United, Continental, and American Airlines also allow their pilots to fly up to the age of 65.
In 2006, ICAO changed the rules that allow captains to fly overseas up to the age of 65. British Airways, Qantas, Air New Zealand, and El Al, to name but a few, are all flying up to the age of 65, and some beyond.
Yet Air Canada, in a letter, stated to its employees who wanted to continue the option of flying that it will not stop until ordered to do so.
I have paid a huge personal price to pursue this complaint. I have been harassed. I have been threatened. I have lost family friends—I guess they weren't friends. My wife refers to this as the gift that keeps on taking.
I have detailed what happened to me at a retirement party in Winnipeg in the year 2006. I have included this in my submission. I believe you might find it interesting and sad what happened to me at this retirement party.
I can say unequivocally that I was a much better pilot when I was forced to leave the company than when I arrived. And why is that? Experience does count. Training and the mentoring of fellow pilots adds up to the fact that over the 20 years a lot of things were learned.
In closing, I would like to say that for the majority of the pilots at Air Canada, other employees at Air Canada, and the remaining 800,000 employees covered by the federal labour code, this request is now almost exclusively in your hands.
I would be more than happy to answer your questions, if you have any.
Thank you, Madam Chair.
:
This morning I'd like to present key points on mandatory retirement from an economic rather than a human rights perspective. Fortunately, the economic perspective concludes in a way that is fully consistent with the human rights perspective. I'll approach this matter by describing major fallacies about mandatory retirement, which I'll abbreviate as MR, and I'll go over the relevant facts.
MR practices are often described as voluntary agreements between an employer and its employees. In fact, MR and the associated pension plans are not an agreement between an individual employee and the employer. These agreements are typically mediated by a union, and if they involve a vote, it is majority-rule imposed on all the employees. In a company applying MR, all employees are subject to it regardless of their individual wishes.
Some have argued that a worker should take a job elsewhere if he or she does not like MR at the current employer, but that option is costly to the individual, who loses wages and seniority. It also involves high mobility costs for the worker situated in a smaller city or working in a union-dominated industry. Moreover, some workers, such as women and recent immigrants, may have a stronger need to work until higher ages because of a shorter work history and inadequate retirement savings, either individually or through a company pension plan.
A common argument is that eliminating MR would act as a barrier to the promotion prospects of younger workers. This point may have been true in the 1960s or even as recently as the 1990s, but it is no longer valid, given the evolving demographics of Canada. We are witnessing an accelerating retirement of baby boomers from the workforce and an emerging smaller cohort of younger workers.
Canada is entering an era of worker scarcity and skill shortages in many occupations and industries that will be seeing faster promotions for younger workers. Some argue that Canada will need to sharply increase immigration of younger workers to satisfy the needs of the economy. But to forego the skills and experience of older workers who wish to continue working, which MR does, is a shortsighted and economically wasteful policy. It also assumes that the economy has a fixed number of jobs available, which is demonstrably false, as the supply of workers and skills is a key constraint on the size of the productive economy.
MR has also been described as necessary for employers to easily get rid of older workers who have lagged in their on-job performance. This argument assumes that employers do not have effective systems to evaluate the performance of workers of all ages and to dismiss poor-performing workers regardless of age. Only a badly managed firm would rely on MR at age 65 to get rid of a younger worker, such as a 40-year-old, who was not performing up to standard.
Similarly, MR has been supported as a means for firms to retire older workers who are overpaid relative to their productivity. Again, this assumes that employers do not have adequate systems for worker assessment and appropriate flexibility in compensating employees in line with their individual performance.
MR has been described as solely a private matter between workers and their employers and not an issue of concern for the general public or public policy. This position is incorrect, since the practice has implications for governments and the taxpaying public. Workers who are forced to retire by virtue of their age and before they wish to stop working impose various costs on the public treasury. They contribute less in taxes when their earnings cease or decline; they draw more in public pensions that are conditioned on incomes; and with the generally worsening health associated with retirement, especially forced retirement, they impose more burdens on our publicly financed health care system.
Prohibiting MR practices in industries subject to the Canadian Human Rights Act by amending the act would only bring the federal government into line with reforms already implemented in all the provincial human rights acts, and very belatedly at that.
Twenty-five years ago, in 1986, the Canadian government stopped the practice of MR with respect to the federal public service. Also in 1986, the U.S. prohibited MR practices nationally in that country. Many other advanced economies have done likewise in the years since then. Nowhere have any of the adverse consequences predicted by supporters of MR emerged as significant issues.
From an economic perspective, then, mandatory retirement has outlived any usefulness that it might have once offered. The interests of both the economy and older workers would be best served by prohibiting the practice under the Canadian Human Rights Act.
Thank you. I will welcome questions.
:
Thank you, Madam Chair.
I wish to once again welcome Mr. Vilven, Mr. Kelly, and Professor Kesselman.
This is my first meeting with you. As you know, I'm the person responsible for bringing this bill to Parliament, so welcome.
Somebody asked me why we are working on this bill, why I thought of bringing this bill to Parliament. In fact, we were actually, as we say in French, interpellé, that is to say, when Mr. Justice La Forest gave his decision from the courts, what he said was it was a complex matter and one that should be resolved by the legislatures. This is what Mr. Justice La Forest said.
We thought it would be not only useful, but important for the legislature in Canada to follow up on this, since really the ball was in our court. This is the reason we're all meeting to discuss this.
I do have several questions. I'd like to ask a question of the former airline pilots, if I may, to begin with.
How many people in your group—I don't know whether I can call it an association, but the group you have formed—do you represent? And how many people, what percentage, does your membership represent of the number of airline pilots who have either reached the age of 60 or are likely to reach the age of 60 within the next five years?
I'm asking the question of one of you two, and possibly Professor Kesselman, eventually.
Mr. Kelly.
:
Yes, I'll answer that, if I may.
We represent approximately 200 pilots, past and present, some retired, some still at the airline facing retirement. I would rather suspect there's a considerably larger percentage of the airline that's anxiously watching our progress and they don't feel inclined to put their head over the parapet and have it shot off when it will be settled long before they get to that position.
I am actually back to work now. Because of the delay in my reinstatement, I'm flying as a first officer because I'm now over the age of 65. I was a captain for 23 years prior to that.
I've run into very little adverse reaction from the crews I've been flying with, and it's been almost 100% positive, with a great many showing support who aren't on our list. It's interesting to see there's probably a considerably larger percentage than we represent on paper that support us.
There are approximately 3,000 pilots at Air Canada. As you are probably aware, complaints through the Canadian Human Rights Commission cannot be filed until the alleged discrimination has occurred, so it's impossible to file a complaint prior to retirement. At that point, you're no longer a member of the pilots association, so you're not represented by them. We are in fact actively opposed by them, which made the whole process extremely difficult.
Worldwide, the pilot profession is well over 65 now in mandatory retirement ages. Many have done away with it altogether. Australia and New Zealand were probably some of the first. Canada has had no age limits on airline pilots for almost 26 years. The position of Transport Canada is that it's far better served by individual assessments rather than blanket age restrictions, and they refuse to apply these age restrictions from the international body within Canada.
:
Excuse me for interrupting. I only have seven minutes.
I wanted to bring up a fact that I think is important and that has not been mentioned. When I first started looking into the possibility of bringing this bill to Parliament, I looked at what was happening at the level of the provinces, in the provincial legislatures, because this bill does not touch Air Canada pilots only. In fact, it is aimed at all employees of crown corporations in Canada.
I looked at the employees of the equivalent of crown corporations at the provincial level, and what I found was that all provinces and territories, with no exceptions, actually had abolished mandatory retirement. New Brunswick, on the other hand, brought in a more flexible system, but it did abolish it as well.
I wanted to bring that bit of information. I think it's important.
My question is to Professor Kesselman. Professor, you have, I think, a wider view. I've read so much of what you've written, obviously. Would you tell us how other institutions reacted institutionally when the mandatory retirement element was withdrawn from their institutions? How did it work? Did it work out reasonably well? What sort of model can they offer to Air Canada and other crown corporations?
:
Briefly, this would depend very much on the type of industry. The most studied industry in the U.S. is higher education and professors, who, because of the enjoyment of the work and the great working conditions, and so on, often will work into their late 60s and into their 70s.
More generally, I think the adaptation needed is, in some firms, a tightening up of the method of evaluating performance. At least, that is perceived as an issue. And of course, giving better performance evaluations can be beneficial to the employer and employees, not only when people are approaching 65 but when they're 40 or 25. They can work to the benefit of both parties in improving individuals who are having issues and in properly rewarding people for their performance.
One other area that has come up more recently, particularly in Canada, is the issue of job-related benefits, such as life insurance and extended health insurance. In this area, because certainly our mortality rates, our risk of dying in any given year, are higher when we're 67 than when we're 57 or 27, life insurance becomes more costly. Extended health insurance becomes more costly, and disability insurance particularly does. If I understand it, at least in most jurisdictions, the courts have allowed differential treatment of individuals over age 65 under life insurance and disability insurance coverage paid for by the employer. That, to me, seems reasonable. Yes, it is a form of discrimination, but it is one whereby we don't want the cost of employing an older worker to become so high that the employer really wants to get rid of that person.
By and large, the adaptation has been fairly straightforward. It is nothing really insurmountable. It is not all that difficult. It's really, in essence, something that can be handled. It's not an issue that should make anyone shrink from pursuing the proposal you have on the table.
:
The licensing body within Canada is Transport Canada. About 26 years ago, they did away with the blanket age restriction on licences. It was previously 60 years of age. The reason for this change was that they felt a personal evaluation made far more sense than a blanket age restriction. Exactly as you say, Madame, people do age at different stages of their life. Some people may be perfectly fit to fly an aircraft at 70; some may not be fit to fly at 35.
All pilots over the age of 40 within Canada are required to complete a category 1 aviation medical with a Transport Canada approved aviation doctor every six months. In addition, we're required to complete competency tests either on the aircraft or within a simulator every six-month period twice a year, and we're subject to route checks at least annually and any time Transport Canada or a company representative wishes to ride on the operation to observe our performance. This is something we've lived with all our lives. We don't expect anything different. We fully expect that safety is the first issue and that this must take precedence, and we're quite prepared to continue to accept it.
Safety was never brought up as an issue in this question by anybody, not Transport Canada, not Air Canada, not the union, and certainly not by us. I've recently requalified after a five-year absence from the flight deck of a transport aircraft and over six years from Air Canada's aircraft. I was able to requalify on the Boeing 777, the largest, most sophisticated aircraft in Air Canada's fleet. I've renewed my category 1 aviation medical by completing a new-hire medical with Air Canada. It's the same medical they give to 20-year-olds, including all the tests. I passed them, and I'm currently back flying, just completing a line indoctrination with the supervisor on regular passenger flights on the Boeing 777.
We don't think for one minute that we've become immortal. We're quite prepared to hang them up whenever we feel the time is approaching or whenever our medical or physical capabilities do deteriorate to the point.... We're very well monitored. We fully expect that to continue.
I hope that answers your question.
:
Thank you, Madam Chair.
Certainly, I'm sympathetic to a lot of what you say, and generally have been supportive of the intention of the bill, but there are a certain number of unintended consequences. Remarkably, Mr. Martin raised a few of them. One of them is that there are fiercely fought collective bargaining agreements and contracts in place. Air Canada pilots are quite different from, say, Jazz or WestJet and other pilots because of that structure. You can't compare the two because it's like comparing apples and oranges.
Part of the consideration that I'm going to embark upon was actually raised by Mr. Kesselman, and that's things like pension benefits, health insurance, disability coverage, and life insurance--which, of course, exponentially increases in cost to those within the collective bargaining agreement and others as you extend the age of retirement. I'll start from this proposition. It would be fair to say, specifically with Air Canada, that your salary range increases exponentially based on age, and probably maxes out, as I understand it, at about age 55 to age 60, which is the top of the salary line. Would you agree with that?
Secondly, the salaries are based on how big a bird you fly. You were mentioning the 777. Would one who hits the age of 55 to 60 and is flying a 777 be at the peak of their salary range?
In terms of Tony's comments about the unions, I know that Madam Folco has consulted with a number of unions, including the FTQ, who are supportive of this measure.
A voice: CSN.
Mr. Michael Savage: CSN and others.
My question is I think for Mr. Kesselman, because you raised this as an economic argument.
We all know the demographic crunch that's coming down on Canada. The Association of Canadian Community Colleges has an interesting statistic that indicates that right now 44% of Canadians are not in the workforce—that's seniors, that's children, that's the unemployed—but that the number is going to rise to over 60% by 2031, which provides obvious challenges for Canada.
Just generally, how much of an opportunity do we have to fill some of those skill gaps if we do away with mandatory retirement or have a serious look at it?
:
Thank you, Madam Chair, members of the standing committee.
[Translation]
Thank you for the opportunity to speak to the committee as you review Bill . As the chair noted, with me is Mr. Philippe Dufresne, our Director of Litigation and Senior Counsel.
[English]
Requiring people to retire at a specified age is discrimination. The Canadian Human Rights Commission has called for repeal of the mandatory retirement provisions of the Canadian Human Rights Act since 1979, just one year after the commission opened its doors. Back in 1979, the commission's opinion was held by a minority. As recently as the 1990s, the Supreme Court ruled that although mandatory retirement was discriminatory, it was a permissible limit under the Canadian Charter of Rights and Freedoms.
[Translation]
The commission is aware of the rationale of the court at that time. Job progression, safety and pensions were, and still are, important. However, the commission maintains that these can be accommodated without perpetuating a discriminatory practice.
[English]
All Canadian jurisdictions, with the exception of the federal jurisdiction and, in a limited way, New Brunswick, have abolished mandatory retirement. Over the years, many federally regulated employers in the federal public service abolished it on their own initiative.
There is no evidence of any significant detrimental impact on employers, pensions, safety, or job progression.
Turning 65, or any other age, does not make someone less qualified to work. In our view, the qualifications of the person measured against the requirements of a job should be the relevant criteria in determining whether someone should be employed.
There are legitimate concerns about the impact of abolishing mandatory retirement in safety-sensitive occupations. Some may ask whether a 75-year-old pilot should be flying a plane. I suggest that this is the wrong question. The real question is whether the pilot is fit to fly the plane. The ability of a pilot may be impacted by a variety of factors unrelated to age, such as lack of sleep, stress, or medical conditions.
From a human rights perspective, what is required is an individualized assessment aimed at determining the ability of individuals to perform the requirements of their job. This should apply regardless of a person's age.
In some circumstances, a job requirement based on a prohibited ground of discrimination may be essential to the performance of the job. The Canadian Human Rights Act provides for the defence of a bona fide occupational requirement, or BFOR , in these cases. For example, bus drivers are required to have good vision. Although this requirement discriminates against people who are visually impaired, it is an acceptable form of discrimination in this occupation.
The act sets out that an employer seeking to prove a BFOR must also be able to show that accommodating people who do not meet the job requirement would impose an undue hardship, taking into consideration cost, health, and safety. As a result, should Bill be enacted, an upper age limit in specific job situations could be considered non-discriminatory if an employer is able to argue a BFOR.
You, of course, have already heard about the Air Canada pilots cases from the previous witnesses. The cases illustrate how a BFOR works. The Federal Court upheld the Canadian Human Rights Tribunal's finding that the mandatory retirement defence in the Canadian Human Rights Act was inconsistent with the charter. At the same time, the Federal Court sent the case back to the tribunal for a re-determination of whether Air Canada's age requirement was a bona fide occupational requirement for its pilots.
It is important to mention that mandatory retirement is not just about age. It has a disproportionate impact on certain groups in Canadian society. For example, women who have accumulated fewer years of work, or delayed their higher education due to child rearing, are particularly disadvantaged by mandatory retirement. Likewise, new Canadians and people with disabilities may be more disadvantaged by being forced to retire.
[Translation]
These were among the factors considered by the Federal Court in the Air Canada case, and were cited as elements in support of the Court's conclusion that the mandatory retirement defence in the Canadian Human Rights Act is not justified.
[English]
The commission supports this bill, and we thank you for the opportunity to be here to express that support.
We would be pleased to answer any questions you may have.
:
Thank you, Madam Chair.
FETCO represents approximately 586,000 employees in the federal jurisdiction.
First and foremost, FETCO members support the principle of removing the provision in the Canadian Human Rights Act that permits mandatory retirement. The time has come. The provinces have adopted this principle in their human rights legislation and regulations. Indeed, most companies in the federal jurisdiction that are members of FETCO have already adopted the principle that employees may work beyond age 65.
We are here today fundamentally to assist the Government of Canada in crafting new legislation and regulations that will address the complexities of changing from the current regime to a new regime. Our objective here is to end up with better legislation that will stand the test of time and address issues appropriately.
The federal sector includes interprovincial and international transport undertakings such as airlines, air traffic control, shipping, railways, and trucking, in which the nature of work performed raises concerns regarding significant risks to public safety.
Repealing the provisions of the Canadian Human Rights Act that allow mandatory retirement will remove an important mechanism that has been available to federal employers to manage some older workers with dignity with regard to diminishing performance resulting from advancing age. The management challenges presented by older workers, particularly in safety-sensitive workplaces, will remain and cannot simply be ignored. FETCO is concerned that Bill fails to provide any guidance or assistance to employers in respect of these significant management challenges.
We are suggesting two policy options. First, employers should be permitted to apply reasonable mandatory retirement ages in certain circumstances and only in specific occupations where the performance of work is associated with a high risk to public safety and the safety of other workers.
Second, a provision should be included in the CHRA that stipulates that it is not a discriminatory practice on the basis of age for an employer to impose periodic skills and competency testing on employees in safety-sensitive positions after they have reached a certain age.
This targeted approach would reduce a potentially significant burden on employers and would not interfere with employees' equality rights. Indeed, in some industries, such as the trucking industries, medical examinations for drivers over age 65 are required on an annual basis. We heard earlier that there are specific arrangements that are required in the airline industry.
Now we want to address issues with respect to the effect of removal of mandatory retirement on pensions and benefit plans.
Regarding pensions, Bill does not address how the elimination of mandatory retirement will be reconciled with pension plans that are designed to be integrated with the Canada Pension Plan, a practical problem we have to deal with.
Bill does not contemplate how the elimination of mandatory retirement will affect the ongoing transition in many workplaces to systems of phased retirement that allow employees to access earned pension benefits while they also continue to accrue pension benefits as a result of a change in employment status.
Turning to benefits now, Bill fails to address how benefits and insurance programs will be treated if mandatory retirement policies are prohibited. Various provinces, such as British Columbia, Alberta, Saskatchewan, New Brunswick, and Nova Scotia, have enacted specific exceptions that allow employers to continue to differentiate between employees on the basis of age in the administration of employee pensions, benefits, and insurance plans.
These legislative exceptions address the legitimate concerns of employers that the cost of financing certain employee benefits and/or insurance plans will increase in respect of older employees who choose to continue working beyond the so-called normal retirement age.
It is FETCO's position that Parliament must address the similar legitimate concerns of employers in the federal jurisdiction regarding benefits such as life insurance and extended health care, for which costs increase substantially with age, and disability benefits, for which costs increase dramatically as a result of increases in the duration of benefit and the frequency of claims.
FETCO notes that, in its current form, Bill will impact the Canadian human rights benefit regulations.
We must say that if you take a look at those regulations as they currently exist, they apply to a different regime, which is going away. So there is a great deal of work that needs to be done by the Government of Canada to consider rewriting regulations that will suit new legislation, and we employers want to be part of that process so that we end up with proper regulations that will stand the test of time.
Finally, removal of mandatory retirement could materially affect federal employers' costs of workers compensation benefits, which is another problem. These benefits are administered by the provinces on behalf of federally regulated employers. There is no doubt that as employees get older, the cost of workers compensation benefits will increase. The probability of injury will increase, and the probability that an employee will not be able to return to work and recover from an injury, because he or she is older, will increase. We have to find a way to balance increasing age with workers compensation regimes managed by the provinces. It's a very real, practical problem.
With respect to severance pay, FETCO is concerned that Bill adds unnecessary ambiguity to the severance provisions of the Canada Labour Code. We're not satisfied that the way you're dealing with this provision is technically clear enough to prevent problems from occurring.
First, section 235 of the Canada Labour Code should make it clear that any employee who voluntarily decides to retire and thereby terminates the employment relationship is not entitled to statutory severance. The existing provisions don't necessarily allow people to see that immediately.
Second, FETCO believes that federal employers should be entitled to continue to impose reasonable mandatory retirement ages where there is a significant risk to public safety arising from a particular occupation. In cases where a legitimate mandatory retirement age is in place and an employee retires with pension benefits upon reaching that age, FETCO's position is that the employer should continue to be relieved of the statutory severance obligation.
What are our conclusions? FETCO supports the Government of Canada's initiative, but it needs to be accompanied by legislative exceptions that continue to allow reasonable age-based retirement policies in some limited circumstances. Specifically, and further, FETCO—
:
Thank you, Madam Chair.
[English]
Thank you, both to the Canadian Human Rights Commission and to the Federally Regulated Employers--Transportation and Communication.
First of all, Mr. Farrell, I have three remarks to make. The first one is that it's not a government initiative; it's a private member's bill. I think it's really important to understand what a private member's bill can do. As I am sure you already know, a private member's bill cannot call on any financial elements because it would require royal assent.
As you know, I initiated this bill, so I was therefore very severely restricted in what I could suggest. It is very clear to everyone in Parliament that if it is to make its way through Parliament, no private member's bill can in any way ask for royal assent. This goes against the rules.
Nonetheless, the elements you presented are important. I would suggest that if this private member's bill eventually finds its way into the current legislation, there is a lot of work to be done subsequently. I would certainly look forward to doing that kind of work. But this private member's bill could in no way touch that. I was limited by this.
Those are elements I wanted to bring up.
Mr. Langtry, in your presentation you mentioned abolishing mandatory retirement in safety-sensitive occupations. I felt that was extremely important in your presentation, and I thought it segued very nicely into Mr. Farrell's presentation. It's the way I thought of the private member's bill as well.
I would like to touch on another point. When I studied this I was made aware that notwithstanding the fact that two former Air Canada pilots had won their case before the tribunal and before the courts, if other Air Canada pilots want to work beyond the age of 60, the whole process would have to be undertaken by those people. The court's decision and the tribunal's decision—correct me if I am wrong—apply only to those two people.
Could you explain why that is so?
:
Thank you, Madam Chair. I also want to thank you, gentlemen, for being here this morning.
First, I want to talk about the concern expressed by Mr. Farrell. We feel that we need to differentiate between what comes under the bill and what comes under collective agreements or agreements between parties. For instance, when there is no union involved, the Minimum Wage Act or the Act respecting labour standards apply. You are worried about retirement. If someone is over the age of 60 or 65—depending on the retirement age set by the employer—and they continue working, they continue contributing to the pension plan and do not receive benefits until they stop working, unless the parties have come to another agreement. So, the two parties continue contributing to the pension plan as they would in the case of any other salaried employee. This person's benefits will be higher when they leave their employment at 68 instead of at 65 years of age because of an additional three-year contribution period. The same goes for other social benefits, such as sick leave. From what I understand, you are talking specifically about leave prescribed by collective agreements or leave also prescribed by the Act respecting labour standards.
This does not increase costs because individuals who leave their employment are usually replaced at the same cost. What may sometimes differ are health-related absences. However, as I have been the employer of 120 people, I can tell you that the oldest employees are not necessarily the ones who take the most sick leave. So, there is an age-related prejudice involved. I am not accusing you of being prejudiced, but this is what often comes to mind.
This bill seems interesting to me, and I believe that we will support it. Amendments will probably have to be introduced, in light of your comments. However, I don't believe that the amendments moved will reflect your position, Mr. Farrell. We are talking about age discrimination. In any company, when employees—whether they are 30 or 40 years old—become unfit to do their job, the employer has the right to let them go, to demote them or to offer them another position. This can also happen with 65-year-old employees. They can be told that their job description has changed and that the position now requires technical skills they do not possess, that the company cannot provide them with the necessary training, that they will not be able to adapt and that they must leave their job. All employers will always have this right, whether the employee is 40 or 68 years of age. I think that we must understand this fact.
There is another consideration here, which will be the topic of my question. Is there an age for retirement when we say that there should be no age discrimination? I will give you the example of the Canadian Senate. Senators are active until the age of 75. Recently, the Senate made a decision not to debate Bill , which had been adopted by the House of Commons. I have seen the vote and can tell you that it was not the oldest members who refused to do the work. Senators are appointed by one person, and they went against a decision made by the elected representatives of 33 million citizens.
This analysis brings us to the question my colleague asked airplane pilots earlier. Who determines when we must leave our job? I think that this decision should always be based on employees' ability to do their job properly. Do you agree with me?
If you do, we will base ourselves on this principle.
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One is constrained when you have messages that you want to convey in this process. I thank you very much for allowing me to continue a little longer than I was allotted.
The reason we need to take some time is because fundamentally we believe we're on the right track here. We're making an amendment to a law that needs to be amended. It needs to be amended properly. We have to have good dialogue and we have to not rush to push a piece of legislation through Parliament. I think we have to make sure that we study it properly and make the proper decisions, and we'll avoid problems as we move down the road. This is why we need to make these recommendations.
Our key recommendations really are this.
In safety-sensitive positions we have to have the flexibility to look at these matters appropriately and to make decisions that will protect the safety of Canadians. We want the law to allow federally regulated employers to comply with applicable international standards that include mandatory policies. We cannot ignore the fact that we operate in a global economy.
We want to include explicit provisions that recognize that employers are permitted to differentiate between employees on the basis of age with respect to pension arrangements, benefits, and other insurance plans because the structure of these benefits is dependent on age. It's a natural process for benefit plans to change depending on age and depending on the duration of benefits. We don't want to be in a situation where we don't have the flexibility to manage our workforce and our pension plans properly. You see now that employers are gradually moving to health care spending accounts, which provide employees of different ages with different options to manage their affairs. We don't want to be caught with certain employees saying we're discriminating against them in one way or another.
Another recommendation is that we want an explicit provision that allows employers to establish workforce skills testing and competency programs that may increase in frequency as an employee's age increases, because we don't want to be caught with a situation where we believe that as employees get older we have to make sure they're meeting the competency requirements. We don't want to test everybody from age 20 to age 75...if we really want to make sure that elderly people are able to demonstrate that they have the physical and mental capabilities to do their work.
We want to include transition provisions that allow employers and unions to make gradual adjustments to the human resources policies, pension and benefits plans, and collective agreements to ensure that there is compliance with these amendments. And that will take some time. We want to include a coming into force provision that allows employers a significant period of time to make the adjustments necessary to comply with the amended legislation. We want the legislation to explicitly state that an employee is only entitled to severance pay if he or she is involuntarily terminated because the current language doesn't necessarily make that clear.
FETCO respectfully submits that we be permitted to engage in meaningful discussions with this committee and other parliamentarians to make sure that when we transition from the old law to the new law we understand the ramifications for the companies in the federal sector. If I ask you if you have actually talked to Air Canada about how this might be restructured, if you have talked to Canadian National Railways, if you have talked to Nav Canada, if you have talked to the grain elevators--they all have different issues that have to be taken into consideration and they will all be affected improperly if we don't make sure we get it right the first time.
That's fundamentally our position.
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I can speak to that if you'd like.
In fact, it is important to note that the New Brunswick legislation is slightly different, which the Supreme Court decision my friend referred to does establish as sort of a good faith qualification. That's when you're terminating someone. However, all provinces have legislation that specifically allows employers to differentiate, on the basis of age, between employees in respect of benefits, pension plans, and some other insurance plans.
I'll give you some examples. We have subsection 13(3) of the B.C. Human Rights Code, which says that discrimination based on age does not apply as it relates to:
the operation of a bona fide retirement, superannuation or pension plan or to a bona fide group or employee insurance plan, whether or not the plan is the subject of a contract of insurance between an insurer and an employer.
There are similar provisions in, as far as I'm aware, all provincial legislation, including section 7 of the Alberta Human Rights Act, section 16 of the Saskatchewan Human Rights Code, section 25 of the Ontario Human Rights Code, section 6 of Nova Scotia's Human Rights Act, and I believe in both Newfoundland and P.E.I. human rights legislation.
Perhaps I will pose a question to the two lawyers. With respect to the New Brunswick case, I would suspect that they called expert testimony to show the cause and effect of age on benefits and pensions and so on. Do you know who they might have been?
Another question flowing from this is that there was a suggestion, at least I think so, by Mr. Farrell that there be an explicit provision—I would gather in the legislation we're considering—to allow employers to establish workforce skills testing programs that commence or increase in frequency as an employee's age increases, which in itself would be age discrimination. But if one were to do that, what's your point of view on that? Secondly, is there any legislation that allows for that to happen?
I have a third question, and I'll leave it at that. As you start thinking about this thing it becomes more complex. Employers can always prove an issue of bona fide requirements, but I suspect it would be much harder for them to do that on an objective or subjective basis than allowing for an exception specifically provided for by legislation, as Mr. Farrell suggests.
Perhaps, Christopher, you may want to start, and then we'll move over to Philippe. I had three points.
My first point is I don't know, with respect to the New Brunswick decision. Frankly, I'm not sure what the nature of the expert evidence was there specifically.
However, I will say that one of the pre-eminent concerns in that case was the fact that there are existing highly complex pension structures that are predicated on the idea that people will retire at 65. So what the court was doing there was I think treading quite a fine balance between legitimate employer workplace concerns and pre-existing structures and the rights of employees to be free from discrimination. That's why they really said the test here is a good faith one based on the intentions of the employer. The employer can't be using a pension plan as a sort of sham to retire people at 65.
In terms of your second question—I think your second and third questions are related—with respect to the idea that you're going to have some sort of differentiation, whether it be based on skills testing or medical testing, in respect of age, and would it be a good idea to have an explicit legislative provision in the legislation that allows for that, as opposed to, say, going down the road of having to prove a bona fide occupational requirement, it's our position that, yes, a specific exception is necessary. And that's really so that we avoid five-year periods of litigation that go to the question of whether or not a specific test that is applied.... As we've heard, these tests do exist. In the airline industry, tests increase in frequency at age 40. It's important that neither employers or employees are going to court to try to justify the validity or invalidity of those laws every time an issue arises.