By Howard Levitt

There are severe repercussions for terminating older, experienced employees

It is no secret baby boomers, those born between 1946 and 1964, are moving toward eventual retirement. They presently make up almost a quarter of the Canadian population, a large portion of the workforce, and interestingly, a larger portion of those employees attending our office for representation.

Why are many employers terminating some of their most experienced and hard-working staffers? The most obvious reason is that it is more cost effective to hire a junior employee to perform the same job at a reduced salary. Another reason is that there is a constant stream of new candidates available to replace older employees in more senior positions.

There are, however, severe repercussions for terminating older, more experienced employees. First, an employee’s age is one of the crucial factors a court looks at in determining appropriate severance. An older employee is entitled to more severance based on the notion that they will have difficulty finding comparable employment

Second, for employers, a sometimes unconsidered repercussion is that they create a lack of mentorship and training for their next generation by terminating their most senior staff. By not being able to pass the torch, employers risk having a dysfunctional, inexperienced team without access to the guidance of more senior members.

Aside from age, the number of years of service an employee has had with the employer, and in the field generally, also warrants a lengthy notice period upon dismissal, unless that employee is bound by an enforceable contract (which relatively few are) limiting their severance entitlements.

It is not unusual for employees in their 60s with decades of work experience with an employer to be awarded close to 24 months of pay (or more in exceptional circumstances).

Older employees may also be subject to either express or indirect discrimination from their employer based on their age. In law, there is a remedy available to employees discriminated against based on their age called “general damages.” This is in addition to damages for wrongful dismissal.

These damages are not taxable and are intended to compensate individuals discriminated against for their loss of self-respect, dignity and pride. General damages for age discrimination can also be awarded before, during and subsequent to a wrongful dismissal. The point being that you do not have to be formally dismissed to seek general damages against your employer for discrimination.

The word “retirement,” which means age-based resignation, connotes age discrimination. If the employer suggests, for example, that an employee should “retire,” that is the sort of evidence needed to establish human-rights damages for the dismissal.

Similarly, if a disproportionate number of older employees are terminated, then age discrimination, and the damages flowing from that, can be established. In that event, the employer had better have a cogent explanation, which withstands cross-examination, as to why that employee was dismissed rather than a younger one. As a practical matter, it will otherwise be assumed that the termination was age-based.

In certain circumstances, the employee who was discriminated against may also be able to seek the remedy of being reinstated to their position or, alternatively, be provided a damage award to compensate. This can be done through human rights tribunals or, in Ontario, the courts as well.

In essence, to prove age discrimination in the workplace, the employee will need to demonstrate they were subject to negative treatment because of their age. There are very few exceptions to age discrimination, and these are restricted to employers being able to establish that the occupational requirements of the job require the employee to be under a certain age — for example, being an airline pilot.

In the Greater Toronto Area and Vancouver, with their skyrocketing housing costs, mortgage interest rates, rent and the possibility of dependent family members, many baby boomers may not have the option of retiring in their 60s. A potential recession will exacerbate that situation.

Another issue we have often experienced with older employees is for-cause dismissals based on allegations that the employee has become incompetent over time — for example, slower, not keeping up with current methods, etc. Employers often take this approach if they’re hoping to negotiate less severance.

Employers using this technique have two problems. If the employee has worked well for many years and is now slowing down, there is not a court in the country that will view that as cause. Second, if the employer alleges such cause in bad faith, when they should have known it was not cause, the court will award the employee additional damages as a result.

For-cause dismissals are often after sudden “workplace investigations” relating to incidents the employer may be overexaggerating in hopes of substantiating a for-cause dismissal. Employers looking to fabricate a for-cause termination may conduct an “investigation” to establish targeted findings to the detriment of the employee. Again, if the court finds this has occurred, the employee’s damages will be even greater.

The foregoing are all factors that the baby-boomer workforce should be cognizant of. My expectation is that many employees in their 60s and beyond will continue to be subject to age discrimination, improper workplace investigations and wrongful dismissals. It will only get worse if there is a recession and layoffs become necessary.