Author: Daniel A. Lublin
The golden years are not always golden. Just ask Stuart Johnson. Nearing his 65th birthday and 40th year with his company, Johnson could have been celebrating. Instead, he was told that company policy required him to retire. But Johnson, the on-air operations manager for Global Television in Victoria, B.C., didn’t believe he had agreed to mandatory retirement at age 65 and argued that it wasn’t a term of his employment. The court decided otherwise.
Nine years after Johnson began to work for Global’s predecessor, he agreed to join the voluntary pension plan made available to all employees. Under the plan, the “normal retirement date” for members was their 65th birthday, but with consent of the company, employees could work beyond this date. Johnson never received a copy of the plan, although, critically, he later received a brochure reiterating that he would be required to retire at 65 in addition to annual pension statements indicating the date that he was expected to retire.
In 1998, Johnson was laid off and severance arrangements were agreed to. However, before he left, a union strike occurred and Global rescinded its lay-off notice. Johnson was told he could stick with Global “as long as he wanted.”
Despite an assurance of tenure, in 2004, following a transfer of business from Victoria to Calgary, Johnson was told that his job would end at his 65th birthday. However, after learning that other employees affected by the transfer were receiving generous severance packages, Johnson wrote to Global arguing that it was never a mandatory requirement to retire and not part of his employment contract. But recently a British Columbia appeal court disagreed, finding that he had “accepted” mandatory retirement as a term of his employment by voluntarily joining the pension plan and continuing to work for years with knowledge that the retirement policy applied to him. Accordingly, Johnson had effectively become bound by an agreement that he hadn’t agree to, and in doing so waived any right to severance following his 65th birthday.
This decision conveys three important lessons for both employees and employers:
No new terms: once employment has commenced, it’s generally too late for an employer to add terms. That is not so if the employee can be viewed as having consented to the changes. While consent is not usually imputed, this ruling indicates that employees should consider protesting the imposition of detrimental terms or risk being haunted by them later on.
Review mandatory retirement policies: Johnson’s lawsuit was “grandfathered” under the old legislation but by now, most Canadian jurisdictions have phased out mandatory retirement, including Ontario, and just recently, British Columbia. In these provinces, employers can no longer force employees to retire without a human rights complaint or significant lawsuit.
Contracts for life exist rarely, if at all, and only when the evidence shows that was clearly the intention between the parties. Get these representations or agreements in writing or don’t waste time trying to prove their validity at trial.