Employer Faces Costly Consequences Due to Age Discrimination Against Employee

Written on behalf of Peter McSherry

Employment relationships may be ended by an employer for any number of legitimate reasons, such as an employer’s need to downsize, an employee behaving in a manner that constitutes “just cause” for termination, or the employee simply not being a “good fit” with the company. However, there are also many illegitimate reasons that an employer may end an employment relationship. If an employer is found to have terminated a person’s employment on the basis of a “protected characteristic” as defined by Ontario’s Human Rights Code, the dismissed employee may seek damages before the Human Rights Tribunal.

Application of the Human Rights Code to Employment Law

The purpose of Canada’s Human Rights Codes, whether federal, territorial or provincial, is, broadly, to protect Canadians from discrimination. The Human Rights Code (the “Code”) of Ontario provides a list of all the areas in which Canadians can expect to be protected from discrimination. This list includes, but is not limited to, housing, services and employment. Any person who experiences discrimination in a workplace setting can seek redress before the Ontario Human Rights Tribunal, if they have been discriminated against on the basis of one of the grounds enumerated in the applicable Code.

In Ontario, the Human Rights Code dictates that a person may not be discriminated against on the basis of, amongst other things, their religion, ethnicity, gender, gender identity, disability, or age. Thus, if any person in Ontario feels that they have been discriminated against in their employment on the basis of an enumerated ground, then they may bring an application before Ontario’s Human Rights Tribunal to seek compensation for the harm done to them. Generally speaking, Human Rights Tribunals award damages for “injury to dignity, feelings and self-respect”, as quantified by the tribunal adjudicator who presides over the hearing of the application. However, if a complainant asserts that they lost their job as a result of discrimination, then that person may also seek compensation for lost wages and reasonable notice, which are typically awarded by courts that review claims of wrongful termination.

Dismissed Employee Asserts that She Was Terminated Because of Her Age

The case of Hall v Zurn Industries Limited involved an employee (“CH”) who began working for Monteco Ltd. on January 18, 2008 as the part-time Director of Human Resources. At the time of her hiring, Monteco was the parent company of three companies (the “Green Turtle companies”) that, in April of 2014, were acquired by Rexnord Corporation. Rexnord announced that Green Turtle would thereafter operate as part of one of its subsidiary companies, Zurn Industries LLC.

As part of its acquisition of Green Turtle, Zurn began to explore how best to integrate the Green Turtle operations into its own. One consideration that formed part of this analysis was that of redundancy, in that Zurn sought to streamline its operations, which necessitated the elimination of duplicative positions or job responsibilities. In October of 2014, CH was advised that her job title of Director of Human Resources was being downgraded to Manager of HR, although she was permitted to retain the same compensation structure and bonus incentivization in her new role. Zurn continued to explore best practices for integration, to which end it considered the elimination of several HR positions in order to consolidate the tasks performed by several people into one cohesive role performed by only one person. Zurn did not consider CH for the role, as she worked only part-time and they felt that she had not expressed interest in the position. In the result, Zurn terminated CH’s employment on June 1, 2015, ostensibly because corporate reorganization had resulted in the elimination of her position. She was 59 years old at the time of termination.

Several months after CH’s departure, Zurn hired a woman who was in her 30s to fill the position of HR Generalist in Mississauga, a position which included a nearly identical job description and duties to the role CH had worked in while with the company. When she learned that Zurn had hired someone considerably younger than her to perform work essentially indistinguishable from the work that she performed herself prior to her termination, she filed a complaint of discrimination with the Ontario Human Rights Tribunal alleging that she had been discriminated against on the basis of, amongst other things, her age.

Proving Age Discrimination Before the Human Rights Tribunal

In order to achieve success in a complaint of age discrimination in employment before a Human Rights Tribunal, the complainant must establish, on the balance of probabilities (i.e. more likely than not) that the respondent company treated the complainant as they did because of her age. As stated by the tribunal in this case, “clear, convincing and cogent evidence is required to satisfy the balance of probabilities test”. However, it should be noted that age need not be the only factor that leads to discriminatory conduct, and direct evidence of discrimination is not required in any event, since discrimination is more often proven by circumstance and inference than by direct, concrete evidence.

The test to establish a case of discrimination in promotion or hiring requires that the complainant prove three things:

1. that the applicant was qualified for the job in question;
2. that, despite their qualifications, the applicant was not hired for the job in question; and
3. that a person who was not better qualified, but was younger, than the complainant, successfully obtained the employment role in question.

If the complainant is able to prove these three elements successfully, the burden shifts to the employer company to demonstrate that the person they hired for the position did in fact possess some kind of qualification, whether educational, experiential or qualification-related, that the complainant herself did not have, which justified the hiring of this other, younger individual.

Employee Makes Successful Case for Discrimination

Given that Zurn had hired “a person significantly younger than the applicant, significantly less experienced, at a significantly lower salary, and for a job and at a location already occupied by the applicant”, the tribunal was quickly convinced that CH had made out a successful case that Zurn had discriminated against her on the basis of her age.

The tribunal dismissed Zurn’s assertion that they had terminated CH as a result of corporate reorganization and nothing else, and that CH’s age had not been considered in the decision to terminate her employment. Instead, it was concluded that CH’s “salary was a factor in the decision to terminate her, and to hire [a younger replacement]. I further find that the respondents had a positive obligation to consider the applicant’s particular career circumstances, and to either offer her, or invite her to apply for, the position”. To the latter point, the tribunal noted that the Ontario Human Rights Commission Policy on Discrimination Against Older People Because of Age dictates that there is a positive obligation on employers to accommodate older employers in that, when positions are to be eliminated pursuant to corporate reorganization, “positions rather than people should be selected for elimination and those positions should not subsequently be refilled”. The tribunal also found it significant that “there was no consideration given to the applicant’s career circumstances in the process culminating in her termination, specifically that she was close to retirement or might have difficulty finding another job given her age and specialized field … these factors made it more imperative to discuss the noted options with the applicant, rather than simply terminating her”.

Employer Ordered to Pay Damages Following Discriminatory Termination

Having found that Zurn had discriminated against CH on the basis of her age, the parties returned to the Tribunal in 2023 for an assessment of remedies. Following a lengthy analysis of the original decision and the evidence of both parties, the tribunal awarded CH lost wages from the date of termination, June 1, 2015, until January 6, 2021, which was the date upon which CH had intended to retire had she stayed with Zurn. She was earning an annual salary of $99,920; and was also awarded $20,000 for injury to her dignity, feelings and self-respect; $7,151.28 for medical expenses she incurred from June 1, 2015 through January 6, 2021; an amount to cover the tax consequences following receipt of these monies in a lump sum; and an amount to compensate for her lost years of contribution to the Canada Pension Plan.

Overall, the compensation awarded to CH was significant and represented a costly mistake on behalf of the employer in its discriminatory termination of her employment.

Contact Peter A. McSherry for Advice on Discrimination in the Workplace

If you have been discriminated against in your employment, whether on the basis of your age, race, gender, or any other ground enumerated under the Human Rights Code, then it is important to seek trusted legal advice as soon as possible. From our office in Guelph, Peter A. McSherry is proud to assist clients throughout Southwest Ontario with their employment-related needs through provision of competent, knowledgeable advice and guidance. Whether your complaint is related to discrimination, wrongful or constructive termination, entitlement to overtime pay, or any other labour or employment-related issue, contact us online or call us at 519-821-5465 to learn how we can assist you.