Human Rights Tribunal of Ontario Finds Provision Allowing Health Benefits to be Terminated at Age 65 Unconstitutional

By Margaret R. Truesdale
November 8, 2018

In May, 2018, the Human Rights Tribunal of Ontario (the “HRTO” or the “Tribunal”) found section 25(2.1) of the Ontario Human Rights Code (the “Code”) to be contrary to section 15 of the Canadian Charter of Rights and Freedoms (the “Charter”).

Mr. Wayne Talos is an Ontario teacher who decided to continue working after he reached age 65.  Mr. Talos brought an application to the HRTO, claiming that he had been discriminated against based on age when his benefits were discontinued, despite the fact that he continued to work full-time.

The employer justified terminating the benefits by relying on section 25(2.1) of the Code, in conjunction with the Employment Standards Act, 2000 (the “ESA”) and its regulations.  Section 25(2.1) of the Code provides that the right to equal treatment under section 5 of the Code with respect to employment is not infringed by an employee benefit, pension, superannuation or group insurance plan or fund that complies with the ESA and its regulations.  The effect of the combination of section 25(2.1) of the Code and the regulations passed under the ESA was that for workers under the age of 65, a workplace group benefits plan is prohibited from making a differentiation based on age, unless the differentiation is made on an actuarial basis.  However, workers over the age of 65 can be denied benefits on the basis of age without the requirement of an actuarial basis to justify the different treatment.

The HRTO noted that involuntary mandatory retirement at age 65 had been prohibited by Bill 211 in late 2005. The Tribunal characterized the scheme of allowing differential treatment of benefits to workers over the age of 65 as a “hold-over” from the era when mandatory retirement was permissible.

Mr. Talos and the interveners who supported him claimed that different treatment between employees over the age of 65 amounted to discrimination.  The HRTO reviewed expert evidence which demonstrated that it would not be cost-prohibitive to provide health care benefits to workers over the age of 65. The Tribunal was clear that the analysis related solely to group health, dental and life insurance benefits, as Mr. Talos did not challenge long term disability, superannuation or pension aspects of the plan. The HRTO reviewed expert evidence demonstrating that it was financially sustainable to include employees over the age of 65 in plans for healthcare, dental and modified life insurance benefits up to age 79.

The HRTO conducted a constitutional analysis under section 15 of the Charter to determine whether the distinction based on age amounted to discrimination. This required the Tribunal to determine whether the law created a distinction based on a protected ground, and to determine whether the distinction perpetuated prejudice or stereotyping. The Tribunal found that the law created a distinction based on a protected ground of age, and that the age distinction created a disadvantage to older workers.  In the analysis of whether the disadvantage was based on stereotypes, the HRTO received expert evidence demonstrating disadvantage, vulnerability and stereotypical beliefs about older workers.

The second part of the constitutional analysis required the HRTO to consider whether the distinction was justified under section 1 of the Charter.  Mr. Talos conceded that there was a rational connection between the section and preserving financial viability of workplace benefits plans.  However, the HRTO determined that the scope of the impugned provision did not minimally impair the rights protected by the Charter.  The “carve out” of older workers was “all-encompassing” and “insensitive”, rather than being based on proper actuarial evidence or a financial stability analysis.

The HRTO also found that the provision was not proportional to the goal.  The actuarial evidence made it clear that it was not generally cost-prohibitive to provide coverage to workers over age 65 and up to age 79 and, therefore, a less-intrusive means could have been developed to address the issue of financial stability for individual plans, if necessary. The Tribunal pointed out that under a normal human rights analysis an individual employer could justify differential treatment if it could not accommodate employees over age 65 without undue hardship, which could be based on financial instability of a benefit plan. By having a complete carve out of older workers, there was no opportunity for an older worker to challenge a change in benefits at age 65.

In the result, the HRTO held that the provision was contrary to section 15 of the Charter..  The provision exposed workers over the age 65 to a vulnerability of losing important employment benefits without recourse to a human rights claim in which the employer would have to demonstrate that it was reasonable under the circumstances to end the benefit for the financial viability of the plan.  The HRTO therefore declared the provision unconstitutional.


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