Federal Court of Appeal rules on mandatory retirement of pilots - International Law Office

Summary
Facts and context
Federal Court of Appeal decision

Summary

On July 17 2012 the Federal Court of Appeal overturned decisions by the Canadian Human Rights Tribunal and the Federal Court of Canada regarding the mandatory retirement of Air Canada pilots. Unlike the tribunal and the Federal Court of Canada, it determined that a provision in the collective agreement between Air Canada and the Air Canada Pilots Association that required pilots to retire at 60 was constitutionally valid.

In his judgment, Justice Denis Pelletier determined that a 1990 Supreme Court of Canada decision on the issue of mandatory retirement was a binding precedent. Both the tribunal and the Federal Court of Canada had proceeded on the basis that McKinney v University of Guelph ([1990] 3 SCR 229) did not apply to the case before them (for further details please see "Mandatory retirement of Air Canada pilots").

Facts and context

In McKinney the Supreme Court of Canada had had to decide whether a section of the Ontario Human Rights Code 1981 (SO 1981, c53) which permitted mandatory retirement beginning at 65 was in breach of the Canadian Charter of Rights and Freedoms. The court decided that although it contravened the Section 15 protection against age-based discrimination, this breach was 'saved' under Section 1 of the charter as a reasonable limit that is "demonstrably justified in a free and democratic society".

In the case before the Federal Court of Appeal, two pilots named Vilven and Kelly challenged the constitutionality of a provision of the Canadian Human Rights Act that is similar to the provision challenged in McKinney. Paragraph 15(1)(c) of the act provides that it is not a discriminatory practice if "an individual's employment is terminated because that individual has reached the normal age of retirement for employees working in positions similar to the position of that individual". Air Canada and the Air Canada Pilots Association relied on this exception to the prohibition against age-based discrimination in justifying the mandatory retirement provision in their collective agreement.

Before November 2006 the International Civil Aviation Organisation (ICAO) did not permit pilots over the age of 60 to act as pilots-in-command of commercial aircraft operating internationally. Since then, ICAO has allowed pilots-in-command under the age of 65, but if the pilot-in-command is between 60 and 65, at least one member of the flight crew must be under 60. ICAO's recommendation that persons over 60 not act as first officers on international flights has remained unchanged.

Although the Federal Court of Appeal decision itself is interesting, its context is also worth noting. The proceedings have been ongoing for a number of years. Vilven was forced to retire in 2003 and filed his complaint with the Canadian Human Rights Commission in 2004. Kelly retired in 2005 and filed his complaint in 2006. The tribunal first heard the two complaints in 2007 and dismissed them. In 2009, on judicial review, the Federal Court of Canada overturned that decision and sent the matter back to the tribunal for reconsideration. Contrary to the tribunal's initial decision, the court found that Paragraph 15(1)(c) contravened the equality provision of the charter and ordered the tribunal to determine whether the breach was justified under Section 1.

Since 2009, while this constitutional question has been considered at various levels, dozens of similar complaints, brought before the tribunal by other pilots, have been held in abeyance. These complaints may remain dormant for some time to come.

In addition, the provision under attack (ie, Paragraph 15(1)(c) of the act) was repealed by the federal budget passed in December 2011; however, the repeal does not take effect until December 15 2012. This means that as of December 15 2012, employers in federally regulated industries will be unable to terminate employees who have reached the "normal age of retirement".

Since the Supreme Court's decision in McKinney, mandatory retirement has been almost entirely eliminated in Canada. Over the course of several years, provisions similar in effect to Paragraph 15(1)(c) have nearly all been repealed. As of December 15 2012, mandatory retirement based purely on age will not be permitted in any Canadian jurisdiction. An exception applies in New Brunswick, where it is not discriminatory if termination is due to a "bona fide retirement or pension plan", which could protect age-related retirement rules contained in such plans.

Amid all this, Air Canada and the Air Canada Pilots Association have been involved in lengthy and sometimes acrimonious collective bargaining over the past two years. At the end of July 2012 an arbitrator sided with Air Canada in the dispute and imposed its final offer - a five-year collective agreement effective until April 2016.

Federal Court of Appeal decision

The Federal Court of Canada decision in this case was 127 pages long. As Justice Mactavish held Paragraph 15(1)(c) to be contrary to the charter, she also dealt with the enforceability of the mandatory retirement provision under another provision of the act - Paragraph 15(1)(a) states that it is not a discriminatory practice if:

"any refusal, exclusion, expulsion, suspension, limitation, specification or preference in relation to any employment is established by an employer to be based on a bona fide occupational requirement."

Much of Mactavish's decision provided an analysis of the evidence in relation to this question. In the result, after assessing the tribunal's evaluation of the evidence, she sent the matter back to the tribunal, asking it to reconsider the issues on the existing record. With the repeal of Paragraph 15(1)(c) due to come into effect in a few months, consideration of bona fide occupational requirements is likely to become more important in future.

However, Pelletier's decision at the Federal Court of Appeal is important not only to anyone affected by mandatory retirement provisions in place before December 15 2012, but also (more generally) to the legal doctrine of stare decisis, which holds that precedents must be respected by courts and tribunals.

Before the court, the Air Canada Pilots Association and Air Canada challenged two aspects of Mactavish's application of the Section 1 test set out in R v Oakes ([1986] 1 SCR 103) to the facts of the case - namely, her finding that:

• Paragraph 15(1)(c) did not "minimally impair" the pilots' right to be free from discrimination; and
• the benefits achieved by the provision were not "proportional" to its deleterious effects.

Although the Air Canada Pilots Association and Air Canada relied heavily on the reasons in McKinney, they did not argue that the Federal Court of Canada was bound to follow the case. Instead, this argument was put forward by the attorney general of Canada, who participated in the proceedings because the pilots sought a declaration that Paragraph 15(1)(c) of the act is unconstitutional.

Pelletier briefly summarised the way in which the Canadian Human Rights Tribunal and the Federal Court of Canada analysed McKinney. He noted that while the tribunal reviewed some case law in which McKinney had not been followed, its decision failed to address directly the question of whether it was required to follow that decision; it simply proceeded as if it were not required to follow McKinney.

Mactavish, on the other hand, conducted a detailed analysis in this regard. She distinguished the present case from McKinney for four reasons. The first reason given was a purported difference between Paragraph 15(1)(c) of the act and the relevant provision of the Ontario Human Rights Code. The provision attacked under the old Ontario code was one that limited the prohibition against discrimination in employment on grounds of age to persons between the ages of 18 and 65, meaning that any mandatory retirement rule affecting employees aged 65 or older was not prohibited. However, Paragraph 15(1)(c) of the act leaves the age at which mandatory retirement becomes permissible dependent on the industry and position.

Mactavish had held that she was not bound to follow McKinney, in part, because:

• the legislative history and objectives underlying the two provisions were different;
• the mechanism for deciding the age at which mandatory retirement becomes permissible was different;
• in the case of the act, unlike in the case of the former Ontario code, employees could not easily know the age at which they could be subject to mandatory retirement; and
• Paragraph 15(1)(c) has greater adverse effects on persons whose labour force participation has been shorter or interrupted - primarily women and immigrants - than did the Ontario code, as it allows mandatory retirement at an age less than 65.

Pelletier ultimately rejected all of these reasons. He found no meaningful distinction between the objectives of the two provisions: both were related to the respective legislatures' concerns regarding "pension plans, youth employment, [and] the desirability of those in the workplace to bargain for and organize their own terms of employment". In addition, he held that while there is a difference in the determination of the age of mandatory retirement, there is no difference in the actual mechanics of the implementation of the two provisions: both schemes can result in mandatory retirement, at one age or another, either being imposed by the employer or as a term of a collective agreement negotiated between the employer and the employees' bargaining agent. Pelletier gave no credence to Mactavish's third point and, on the last point, held that "the presence of a group of persons who are differentially affected is... a point of distinction between mandatory retirement at any age and no mandatory retirement at all".

The act and the former Ontario code differ in the manner in which they determine the age at which mandatory retirement becomes permissible. This, Pelletier noted, was the only possible point of distinction between the case in question and McKinney. He then addressed the three other reasons given by the Federal Court of Canada for not following McKinney:

• In McKinney the Supreme Court indicated that it did not consider its decision to be the last word on mandatory retirement.
• The evidentiary record in this case included new expert reports and "new facts which call into question the factual underpinning of the Supreme Court's decision in McKinney".
• Public policy and judicial attitudes in respect of mandatory retirement have developed since the decision in 1990.

Referring to the recent Ontario Court of Appeal decision in R v Bedford (2012 ONCA 186), Pelletier outlined the doctrine of stare decisis. In his view, this doctrine clearly disposed with Mactavish's last three reasons for not following McKinney. To the extent that a door was left open to reconsider the issue of mandatory retirement, the principle that courts must follow prior decisions of other courts, and the hierarchy of courts in Canada, meant that the Supreme Court of Canada "was holding the door open for itself and not for others". Similarly, the values of certainty and finality which underlie the doctrine of stare decisis could not justify lower courts deciding not to follow Supreme Court jurisprudence merely because of differences in the evidentiary records or because social policy has evolved. Rather, it is the lower courts' role to allow parties to establish the evidentiary record upon which the Supreme Court of Canada decides whether to reconsider an earlier decision.

With respect to Mactavish's first reason for not following McKinney, after a relatively detailed analysis of the reasoning of the Supreme Court of Canada's reasoning, Pelletier determined that it applied equally to mandatory retirement at an age younger than 65. He ordered that the matter be returned to the tribunal and that the complaints be dismissed. However, near the end of his judgment, Pelletier also stated: "It may be that conditions have changed to the point where the Supreme Court is prepared to revisit the issue."

There are reports that the pilots are planning to seek leave to appeal to the Supreme Court of Canada.

For further information on this topic please contact Carlos P Martins or Andrew W Macdonald at Bersenas Jacobsen Chouest Thomson Blackburn LLP by telephone (+1 416 982 3800), fax (+1 416 982 3801) or email (cmartins@lexcanada.com or amacdonald@lexcanada.com).