Under common law, jobs don’t usually come with a fixed retirement date. But that’s by no means the whole story
In an earlier column on the topic of mandatory retirement, I indicated that there is no such thing as mandatory retirement in an overall sense – rather, it is something peculiar to arrangements made on a case by case basis.
One must look to the employment contract to see if mandatory retirement is an agreed term that binds the employee in question.
For instance, in large-scale employments in a unionized environment, collective agreements which often contain mandatory retirement become the employment contracts for large groups of workers. Where an employee reaches the age of retirement defined in the collective agreement, mandatory retirement certainly exists in relation to that employment.
The worker retired under an enforceable mandatory retirement policy at age 65 does not lose the right to continue working past age 65 in some other employment where there is no such policy. Nothing at law makes it such that the worker must cease all work at age 65. The worker past the age of 65 can enter private common law employment, as opposed to unionized employment that makes retirement mandatory. Because common law employment involves distinct employment contracts for each employee that may vary from another employee in the same workplace, such employment does not typically contain any mandatory retirement, unless that specific employer has gone to the trouble of attempting to bring a retirement policy into place.
A B.C. case involving common law employment highlights the difficulty employers and employees have in determining whether mandatory retirement is in effect.
In this case, the original employment agreement was oral, not written. The employment was of long duration, some 39 years. At the inception of the employment, there was no retirement policy stated. Mandatory retirement was thus not a term of the employment contract at inception of employment.
However, during the course of the long employment, the employer introduced a voluntary plan called a staff retirement plan, which the employee in this case joined some years later. The employee never received any copy of the plan. However, at some point, he did receive a brochure that generically described the plan. The plan described a normal retirement date calculated to coincide with the 65th birthday of the employee.
The wording of the plan did not make it clear that retirement was mandatory upon reaching age 65. In fact, there was provision in the plan for an extension of retirement timing to age 71. The employer also gave this employee a booklet describing the plan and its effects on retirement, and sent annual statements to this employee describing his projected retirement date coinciding with his 65th birthday.
To further confuse the situation, there was evidence that the employer, later in the employment, declared to this employee that he could work with the employer for as long as he wanted to. Later, the employee was constructively dismissed some months prior to the date the employer had scheduled as his retirement date. The employee sued for reasonable notice.
The trial court ruled that mandatory retirement did not form a term of the employment contract, and the employee was owed reasonable notice for termination that extended well beyond his 65th birthday.
The Court of Appeal reversed that decision. It focused on whether the employer gave the employee clear and unambiguous notice about mandatory retirement such that it became an agreed term. The court found this employee had received clear knowledge of the existence and retirement aspects of the plan when he received the brochure, the booklet and the monthly statements.
The court found that the employee had received clear and unambiguous notice, yet the employee kept working for many years under this knowledge. The court said this was sufficient to form an agreement between the parties regarding mandatory retirement, and that it became a term of the employment contract.
The court awarded notice from dismissal to the age of 65, but not beyond, cutting reasonable notice down to the amount of time from dismissal to retirement date. In this case, the employee was denied reasonable notice based on the mandatory retirement plan.
The upshot of this decision is this: Mandatory retirement can exist in common law employments, depending on the terms and facts of each employment contract. As well, a mandatory retirement provision in an employment agreement can constitute an express provision that can defeat the requirement to give reasonable notice past the stipulated age of retirement.