opportunity to ongoing training and development opportunities. Some older employees may need to be encouraged to keep up with their professional development. At the same time, employees may need some accommodations as they age, depending on the nature of the job and the employee’s physical and mental condition. Having to deal with aging employees with no fixed end to their employment may force some employers to invest more time and effort into their performance management systems and execution. Fortunately, this is an investment which should pay benefits throughout an employer’s entire workforce. Adjusting to the Change: Severance Normally when employment ends at the employer’s behest, the employer must pay termination and/or severance pay under both the judge-made common law and statute law, unless there is just cause for the termination or another exception to the rule. In the past, employees subject to mandatory retirement policies who were required to leave at the specified retirement age were not entitled to termination or severance pay. That will change when mandatory retirement is eliminated. Employers who wish to have older employees leave will no longer have a cost-free way to accomplish that, unless the employee chooses to retire. Note that offering an employee a chance to retire rather than be fired will likely be treated as a constructive dismissal – in other words, equivalent to any other dismissal, and just as costly. Therefore, employers should plan to pay statutory termination notice and severance pay, at the very least, if they wish to terminate an older employee. The fact that an employee can then choose to retire under the terms of a private pension plan or CPP has not limited employers’ liability to date. Keep in mind that employees are also entitled to wrongful dismissal damages under the common law (the judge-made law), which may be considerably more than the statutory amounts. For older employees, these damages may be at the higher end of the scale, especially for long-service employees. However, older employees who have not performed adequately can still be dismissed for just cause without notice or pay in lieu, as long as the employer has applied reasonable standards and given the employee any warnings and chances to improve that may be necessary in the circumstances. About Hewitt Associates With more than 60 years of experience, Hewitt Associates (NYSE: HEW) is the world’s foremost provider of human resources outsourcing and consulting services. The firm consults with more than 2,300 companies and administers human resources, health care, payroll and retirement programs on behalf of more than 300 companies to millions of employees and retirees worldwide. Located in 35 countries, including Canadian offices in Toronto, Montreal, Vancouver, Calgary and Regina, Hewitt employs approximately 22,000 associates. For more information, please visit www.hewitt.com. www.hewitt.com |
