In the employment context, all jurisdictions across Canada provide specific exemptions for various forms of discrimination concerning certain retirement or pension plans, known as the bona fide pension-plan rule.515 The rule allows employers to engage in
discriminatory treatment of employees, based upon their age when those actions are part of the operations of a bona fide pension or retirement plan.516
(i) Case law to determine whether plan is bona fide
New Brunswick (Human Rights Commission) v Potash Corporation of Saskatchewan Inc517
In this case an employee filed a complaint with the New Brunswick Human Rights Commission because he was asked to retire at the age of 65, pursuant to the mandatory retirement policy contained in his employer’s pension plan, and where he alleged that this constituted age discrimination.518 Under the provincial Human Rights
Code, the age-discrimination provisions are expressly declared not to be applicable under section 3(6)(a) if the employee is terminated pursuant to a bona fide pension plan.519 The dispute in this case pertains to what test is triggered by the use of the
phrase “bona fide” in connection with a pension plan in the code.520 As per Binnie,
LeBel, Abella and Rothstein JJ, of the SCC, the three part Meiorin test is applicable to section 3(5) of the Human Rights Code, which deals with BFOQ, but does not apply to section 3(6)(a) of the code, which addresses bona fide retirement or pension plans.521
In enacting section 3(6)(a), the legislature was seeking to confirm the financial protection available to employees under a genuine pension plan, while ensuring that they were not arbitrarily deprived of their employment rights pursuant to a sham.522 To
meet the bona fide requirement in section 3(6)(a), a pension plan must be subjectively
515 Ray-Ellis Halsbury’s Laws of Canada 478. 516 Ibid. 517 [2008] 2 SCR 604, 2008 SCC 45 (CanLII). 518 [2008] 2 SCR 604, 2008 SCC 45 (CanLII) 8 [1]. 519 [2008] 2 SCR 604, 2008 SCC 45 (CanLII) 8 [2]. 520 Ibid. 521 [2008] 2 SCR 604, 2008 SCC 45 (CanLII) 12 [17]-[18]. 522 [2008] 2 SCR 604, 2008 SCC 45 (CanLII) 14 [24].
and objectively bona fide.523 It must comprise a legitimate plan, adopted in good faith
and not for the purpose of defeating protected rights.524 In addition, the inquiry should
be into the overall bona fides of the plan and not the actuarial details or mechanics of the terms and conditions of the plan.525 Registration under the Pension Benefits Act is
a helpful indication of the bona fides of a pension plan.526
As per McLachlin, Deschamps and Charron (partially concurring), a bona fide pension plan under section 3(6)(a) of the New Brunswick Human Rights Code is one whose mandatory retirement terms
(1) were adopted for a purpose rationally connected to the operation and success of the plan;
(2) were adopted in good faith and does not represent a sham to avoid employee rights; and
(3) are reasonably necessary taking into account the operation and sustainability of the plan.527
This reading of the Code best reflects the legislature’s intent, based on the wording of section 3(6)(a) and the applicable principles of statutory construction.528
(ii) Application of legislation
In Begin v Richmond School District529 an early retirement incentive plan (ERIP)
allowed teachers between the ages of 55 and 64 the opportunity to apply for pay-outs for early retirement; on average only 10 pay-outs were available per year and the youngest eligible teachers were given preference as they would be affected the most
523 [2008] 2 SCR 604, 2008 SCC 45 (CanLII) 16 [32]-[33]. 524 Ibid. 525 Ibid. 526 [2008] 2 SCR 604, 2008 SCC 45 (CanLII) 17 [37]. 527 [2008] 2 SCR 604, 2008 SCC 45 (CanLII) 28 [89]. 528 [2008] 2 SCR 604, 2008 SCC 45 (CanLII) 27 [84]. 529 No 38 (2007), 59 C.H.R.R. D/247 (C.H.R.T).
in terms of reductions in pension benefits upon retirement.530 The ERIP was found not
to be discriminatory despite differential treatment based on age, because it was exempted as a bona fide retirement plan.531 The plan was founded on sound and
accepted retirement-plan practice, and there was no established practical alternative consistent with the plan’s main objective, namely to offset the negative financial consequences of early retirement. Lastly, it was adopted honestly and in the interest of such practice.532
5.4 CONCLUSION
Direct discrimination is the most obvious form of discrimination, where a rule, policy or action clearly contains or makes an adverse distinction on the basis of one of the listed grounds of discrimination.533 While indirect discrimination lacks the obvious quality
that characterises direct discrimination, it occurs when a seemingly neutral policy or rule applied equally to all persons has the effect of discriminating against an individual or group on the basis of a prohibited ground.534
From a UK perspective, while there is no general justification for direct discrimination, except for an objective age justification, indirect discrimination has always been justifiable. For this reason direct and indirect discrimination have been held separate and mutually exclusive.535 Indirect discrimination is justifiable if it represents a
proportionate means of achieving a legitimate aim, while it has always been possible to justify direct race and sex discrimination where sex or race is a GOQ or GOR exemption. In the UK the concept of “accommodation” is confined to disability, while in other jurisdictions it extends further. By way of example, should exceptions be created to accommodate certain religious-group practices especially where others are affected?536
530 No 38 (2007), 59 C.H.R.R. D/247 (C.H.R.T) ; Ray-Ellis Halsbury’s Laws of Canada 488. 531 Ibid.
532 Ibid.
533 Ray-Ellis Halsbury’s Laws of Canada 189. 534 Ibid.
535 Fredman et al Discrimination Law 190. 536 Fredman et al Discrimination Law 220.
From a Canadian perspective defences to a claim for discrimination fall into one of two categories, namely that of BFOR and BFJ, and such defences are justified by applying the Meiorin test.537 Specific considerations also apply to related bona fide exemptions
in particular areas, including retirement and pension plans. The Meiorin test replaced a more confusing split approach to BFOR defences, which distinguished between direct- and adverse-effect discrimination, while presently the BFOR defence does not distinguish between direct or indirect discrimination.538 Further to the above, the SCC
has ruled that an employer cannot successfully claim a BFOR defence unless it has reasonably accommodated the employee to the point of undue hardship, regardless of the form the discrimination takes.539
537 Ray-Ellis Halsbury’s Laws of Canada 452. 538 Ray-Ellis Halsbury’s Laws of Canada 453. 539 Ibid.