Question: Once an employee reaches age 65 and becomes entitled to receive her pension, can she be dismissed without the employer having to provide notice?
Answer: If the company has an employment agreement or a policy, which is consistently enforced, has been consistently communicated to employees and provides for mandatory retirement at age 65, an employee who attains such age can be retired with no obligation to provide either statutory or common law notice.
But if there is no communicated and known mandatory retirement policy or history of requiring employees to retire at age 65, an employer must give reasonable notice or pay in lieu of notice when requiring an employee to retire at age 65 because this amounts to a termination without cause.
An employee’s entitlement to receive pension benefits does not relieve the employer of either its statutory or common law obligations to provide reasonable notice or pay in lieu of notice. Furthermore, an employer who tries to wrongfully pressure an employee to retire can be liable for damages for constructive dismissal.
If a company does not have a mandatory retirement policy but wishes to put one in place, such a policy can be implemented by providing proper and effective notice to its employees. Despite the above, it is important to note there is a great deal of political debate in this area and it is very likely there will be changes to the law with respect to mandatory retirement in the future.
Peter Israel is counsel to Goodman and Carr LLP in Toronto and is head of the firm’s Human Resource Management Group. Peter can be reached at [email protected] or (416) 595-2323.
Answer: If the company has an employment agreement or a policy, which is consistently enforced, has been consistently communicated to employees and provides for mandatory retirement at age 65, an employee who attains such age can be retired with no obligation to provide either statutory or common law notice.
But if there is no communicated and known mandatory retirement policy or history of requiring employees to retire at age 65, an employer must give reasonable notice or pay in lieu of notice when requiring an employee to retire at age 65 because this amounts to a termination without cause.
An employee’s entitlement to receive pension benefits does not relieve the employer of either its statutory or common law obligations to provide reasonable notice or pay in lieu of notice. Furthermore, an employer who tries to wrongfully pressure an employee to retire can be liable for damages for constructive dismissal.
If a company does not have a mandatory retirement policy but wishes to put one in place, such a policy can be implemented by providing proper and effective notice to its employees. Despite the above, it is important to note there is a great deal of political debate in this area and it is very likely there will be changes to the law with respect to mandatory retirement in the future.
Peter Israel is counsel to Goodman and Carr LLP in Toronto and is head of the firm’s Human Resource Management Group. Peter can be reached at [email protected] or (416) 595-2323.
