Human Rights Tribunal of Ontario Holds Benefits “Carve-out” Provision Affecting Employees Aged 65 or Older Unconstitutional

  • October 04, 2018
  • Giovanna Di Sauro

In Talos v. Grand Erie District School Board, 2018 HRTO 680 (“Talos”), the Human Rights Tribunal of Ontario determined that a school board could not rely on a blanket statutory carve-out to justify ceasing benefits coverage at 65 years of age.

The Tribunal application was brought by Mr. Talos, a secondary school teacher who continued to work past 65 years of age. In accordance with the collective agreement between the school board and Mr. Talos’ union, Mr. Talos’ extended health, dental, and life insurance benefits ceased when he turned 65.

Section 25(2.1) of the Human Rights Code (“Code”), when read together with section 44 of the Employment Standards Act, 2000 (the “ESA”) and O. Reg. 286/01 under the ESA, generally allows employers to terminate benefits for workers over age 65. Mr. Talos filed an application with the Tribunal, alleging the school board had discriminated against him on the basis of age. Mr. Talos argued that section 25(2.1) of the Code, when read in conjunction with the relevant ESA section and regulation, was unconstitutional and contrary to the Canadian Charter of Rights and Freedoms.

The school board took the position that section 25(2.1) constituted a complete defence to Mr. Talos’ allegations of discrimination. In an earlier interim decision, the Tribunal had agreed with the school board that Mr. Talos’ claim would have no reasonable prospect of success unless section 25(2.1) of the Code was held to be unconstitutional.

A number of unions and associations, as well as the Ontario Human Rights Commission, intervened for Mr. Talos. The Attorney General of Ontario also intervened in favour of the school board. Several experts were called by the parties to provide actuarial evidence justifying the exclusion of employees aged 65 or older from benefit plans, as well as evidence of prevailing societal attitudes with respect to these employees, and the role of collective bargaining.

While the Tribunal chose not to follow Arbitrator Etherington’s earlier decision in Chatham-Kent (Municipality) v. O.N.A. (O’Brien) (Re), 104 C.L.A.S. 267 (“Chatham-Kent”), the Tribunal agreed with the arbitrator’s earlier finding of a prima facie violation of section 15(1) of the Charter. However, the Tribunal’s analysis radically departed from the analysis in Chatham-Kent when considering section 1 of the Charter. The Tribunal held that neither the length of an employee’s career, nor an employee’s membership in a union, were relevant considerations. The Tribunal considered it irrelevant that Mr. Talos’ employment was governed by a collective agreement, and rejected the proposition that the purpose of section 25(2.1) was to provide flexibility for employees and employers to determine optimal compensation through a collective or individual bargaining process. The Tribunal declined to address some of the expert evidence regarding the desirability of permitting employers and employees to bargain their own terms of employment.

The Tribunal held that Mr. Talos’ eligibility for Old Age Security, the Ontario Drug Benefit program, and his pension under the Canada Pension Plan had no bearing on his Charter claim. Similarly, the Tribunal rejected the notion that “social consensus” had any bearing on whether or not there was discrimination, and was not persuaded that a worker’s lifetime of earnings was relevant to the constitutionality of section 25(2.1).

On the evidence before it, the Tribunal held that the financial viability of workplace benefits plans could be achieved without making workers aged 65 and older vulnerable to the loss of employment benefits without recourse to a claim under the Code.

The Tribunal ultimately held that section 25(2.1) of the Code, when read together with section 44 of the ESA and O. Reg. 286/01, violates section 15 of the Charter and is not saved under section 1. The practical outcome of this finding is that the school board could not rely on section 25(2.1) of the Code as a blanket defence in Talos, such that the applicant would not be precluded from claiming a breach of the Code.

The Talos proceeding did not address long-term disability insurance, pension plans, and superannuation funds, as Mr. Talos limited his allegations to the group health, dental, and life insurance benefit plan.

The Tribunal’s finding in Talos should also not be confused with a finding of invalidity of section 25(2.1) of the Code. As only superior courts have the power to issue general declarations of invalidity, and the Tribunal is not a “superior court”, the Tribunal’s finding in Talos is technically limited to the proceeding in Talos. It remains to be seen whether or not Talos will be directly challenged through reconsideration or other avenues in the future.

About the author

Giovanna Di Sauro is a labour and employment lawyer with Filion Wakely Thorup Angeletti LLP. She advises employers in all areas of workplace law.

The views expressed in this article are solely those of the author, and do not constitute legal advice or an opinion.


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