B.C. tribunal finds reduced benefits for older workers not age discrimination

The decision is based on a section in the code that makes an exception for employment discrimination on the grounds of age, marital status, physical or mental disability and sex, as long as it’s part of a so-called bona fide group or employee insurance plan that’s been adopted in good faith, rather than for the purpose of defeating employees’ protected rights.

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John Barker, an employee of Molson and its predecessor for 25 years, filed a complaint after his benefits were reduced in 2015, when he was 68. For employees over 65, Molson no longer covers short- or long-term disability, dental and vision care, and significantly reduces life and accidental death and dismemberment insurance coverage.

Barker said the plan was discriminatory because benefits are part of employee compensation. Therefore, an employee over the age of 65 is effectively receiving $6,000 less than an employee under age 64 doing the same work.

In writing the decision, tribunal member Devyn Cousineau said the tribunal didn’t have the ability to rule on the constitutionality of the exception and whether it impinged on Barker’s rights under the Canadian Charter of Rights and Freedoms.

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“While I have serious reservations about the constitutionality of [the exception] and its impact on Mr. Barker’s Charter rights in this case, I find I have no choice but to conclude that the exemption applies,” she wrote.

The ruling is a contrast to a May 2018 ruling on benefits age discrimination in Ontario. In Talos v. Grand Erie District School Board, the Human Rights Tribunal of Ontario ruled that the provision in the provincial human rights code that allowed employers to terminate benefits at age 65 was unconstitutional.

The difference in rulings is down to what each tribunal is able to review, says Sukhvinder Dulay, a pension and benefits lawyer at Hicks Morley Hamilton Stewart Storie LLP. While the Human Rights Tribunal of Ontario can consider the constitutionality of such provisions, B.C.’s tribunal can’t.

“The B.C. rule is quite different than Ontario in the sense that they have a statutory rule that the tribunal is not meant to examine Charter issues, which is exactly what the Ontario tribunal did,” she says. “While the decision of the Ontario tribunal does not have the effect of striking down the legislation at issue in Ontario, I think we will probably just continue to see these types of challenges. It will come up in all the jurisdictions, but the way they treat it will be based on what the law is in each jurisdiction.”

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The more “influential” decisions for employers may come when some of the age-discrimination cases make it to judicial review by a court, says Dulay. “This is certainly on a lot of employees’ and employers’ radars, where they’re taking a closer look at their benefits program to see age-based coverage limitations that are in there.”

Molson’s reduction in benefits coverage at age 65 is a relic of a 1988 collective bargaining agreement. At the time, B.C. had a mandatory retirement rule in place, but the company wanted to retain an employee past age 65. The collective agreement included a letter of understanding between the parties, which contemplated abolishing mandatory retirement and set out that any employee who worked past age 65 would be entitled to the same employee benefits as a retiree. While the union first objected, Molson argued it would be too expensive to provide full benefits, such as long-term disability, to older workers.

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The letter of understanding stuck around through successive collective bargaining agreements. In March 2015, in preparation for another round of bargaining, Molson realized it had inadvertently failed to apply the benefits reduction to its workers over 65. It notified the union that it planned to do so, but gave those employees dental benefits until Sept. 1, 2015 to allow them to address any immediate dental concerns.

Barker argued the cessation of dental coverage meant the plan wasn’t bona fide, as there was no actuarial reason to terminate those benefits for workers over the age of 65. However, Cousineau said she was bound to evaluate the plan as a whole, rather than examine the actuarial details, and found it to be genuine.

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