Monday, January 23, 2006

Canada's workforce just got older

Gone is the mandatory age 65 retirement. How will this affect companies with an older workforce?

McCarthy Tétrault LLP - Publications - Ontario Government Officially Puts an End to Mandatory Retirement: Changes Will Be Effective December 12, 2006: "Effective December 12, 2006 the definition of 'age' in the Code will be amended to read simply 'an age that is eighteen years or more.' As a result, the Code will generally prohibit employers from forcing employees to retire merely because they are 65 or older."

Often employers with mandatory retirement policies have decided to continue to employ a poor performing employee nearing age 65 with the knowledge that on his or her 65th birthday, the employee would be required to retire.

On benefit plan costs:

In fact, there are a variety of issues that employers should consider in relation to their benefit plans. For example, in the interest of maintaining strong employee relations, employers may consider allowing employees beyond the age of 65 to continue to participate in their benefit plans. However, the cost of providing benefits to older employees may have a significant impact on the cost of employers’ benefit plans.

On age discrimination:

Employers will also have to be cautious when dealing with older individuals in the context of hiring and performance evaluation. For example, individuals who are 65 years of age or older and are unsuccessful in their job applications may make a complaint of age discrimination against their prospective employers.

Conclusion (On GM, Ford, Stelco, and other companies with a larger, older workforce and huge pension plans. Will there be more job cuts?)

The new Act provides employers with a twelve-month ‘grace period’ in which to address the various issues that arise as a result of the end of mandatory retirement in Ontario.

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