When mandatory retirement is abolished in Ontario later this year it may help offset the province's skill shortage, the head of the Ontario Chamber of Commerce says.

"Ending mandatory retirement is one way to address that situation," says Len Crispino, the chamber's president and CEO. "People with 'corporate memory' in place have experience and if they're capable and healthy and have already done the work, they don't require the training of bringing on new people. Older people bring along younger people - they become mentors."

A survey of 600 members, conducted in September 2004 by the chamber, found "two-thirds believed that it (the new law) will not have a financial impact on their organization," Crispino says.

The change is being welcomed by small business owners.

Len Crispino

"We surveyed our membership a year ago about whether the Ontario government should end mandatory retirement and 68 per cent said yes," says Satinder Chera, director of provincial affairs at the Canadian Federation of Independent Business (CFIB).

"Small business owners ... want government to stay out of telling people when they should or shouldn't work," he says. "They (workers) are in the best position to decide when it's time for them to hang up their hat."

Mandatory retirement will end in Ontario on Dec. 12 - exactly one year after the legislation received royal assent.

"Mandatory retirement is a discriminatory practice that makes no sense in a time when we're all living longer, healthier and more active lives," Labour Minister Steve Peters said in a news release on Dec. 12, 2005. "Ending it is the right thing to do."

The Ontario Human Rights Commission (OHRC) also supports the change.

When the bill was introduced, says Afroze Edwards, senior communications officer at the OHRC, the commission "was pleased that the government was taking the initiative to remove the upper age limit, which has adverse effects on older women, workers with disabilities and immigrant women who previously may not have been accruing enough benefits when they retire as they weren't in the workforce long enough."

The new law will change the definition for age under the Human Rights Code in the area of employment from between 18 and 65, to over 18, Edwards says.

"The commission pushed for this change due to the discriminatory effect on people over 65," Edwards says. "People were being told they must leave based solely on age, not on their ability to do the job. We wouldn't do that based on race, sex or disability."

Alberta, Manitoba, Quebec and Prince Edward Island already treat mandatory retirement as discriminatory and have essentially abolished it, as have Nunavut, the Yukon and the Northwest Territories.

"Retirement should be a choice at any age, without any government intervention, except for access to government programs," Crispino says.

Satinder Chera

There are also economic reasons to allow people to continue working, says Bill Gleberzon, associate executive director of CARP, Canada's association for the fifty-plus.

"Some may want to keep working and many must - they don't have a pension of any substance to fall back on," he says. "There aren't enough young people to replace the older people who are beginning to retire and immigration is not filling the gap," he adds.

Others, however, are less certain of the advantages of ending mandatory retirement.

Glen Stone, public affairs manager for the Toronto Board of Trade, concedes that "there are people who are 65 and fit as a fiddle, with lots of energy and capability and who can continue to contribute for another five, 10, 20 years. But, many people into their 70s and 80s aren't as productive.

"Is it age discrimination for an employer to say that he wants to replace that worker with someone younger?" he says. "Where is the right as an employer to the best possible person for the job?" In a small business that is not growing or expanding, retirement is a natural way to create advancement opportunities for younger workers and underrepresented workers, Stone says.

George Waggott, an employment lawyer with Lang Michener LLP, agrees that mandatory retirement presented an easier objective task. "An employer could unilaterally say, once you're 65, the prevailing bar: 'I'm not required to keep you here.' " Without it, "you're closing up the system so that younger workers can't go into certain areas or industries," Waggott says. "There are problems with recruitment, higher unemployment for youth, having to keep people on where there's no job growth."

Morley Gunderson, the CIBC Chair in Youth Employment and a professor at the University of Toronto, also sees problems for employers. He says it will be especially difficult for small business owners to "engage in succession planning when you don't know if a person is leaving or not."

Older workers who choose to stay on "tie the hands of small businesses who can't afford to do anything other than keep them on," Waggott says, creating "the potential for pitting employees against each other - the older ones who have the right to stay and others who may feel they're carrying the load for them."

"For those who decide to stay on, an employer will have to decide: 'Will we allege cause for poor performance?' " he says.

Despite the new law, mandatory retirement in Ontario will continue to be legal in limited circumstances, including where an age-based job requirement is a bona fide occupational requirement. Precisely what qualifies is uncertain.

"In an industrial setting, is lifting 20 kilograms a genuine bona fide occupational requirement?" Waggott says.

"A lot of people police themselves," Gleberzon says. "They know when they're not able to perform properly. There's no reason to not give them other types of assignments. They're easily accommodated."

But the CFIB's Chera says "a lot of business owners have set their HR plans years in advance as part of their fixed budgets.”

He adds that the plans recognized that people would be retiring at a certain time and the change "throws off these plans."

"Small businesses that have small profit margins ... need certainty in law to plan accordingly," he says.

Says Stone: "If you have one older employee in a 10-person firm, that's 10 per cent of your workforce. If that person decides not to retire at 65 and the company has a pension plan, it's possible that that worker may be withdrawing from the plan, making no contributions and getting a salary.

"If you don't move the age of entitlement (to benefits) to the age of retirement you aren't accomplishing the goal of decreasing the burden on younger workers," he says.

The cost to employers of life insurance and drug plans increases with age, Stone says. "Employers will suffer a large cost increase (if older workers stay on) unless the Ontario Drug Benefit Plan entitlement remains at 65."

Ending mandatory retirement does not mean imposing mandatory employment, Waggott says.

"This change won't force people to work past a certain age," he says. "There may be lots retiring earlier."

In fact, says Gleberzon, "the average retirement age is still about 61, 62."

Says Crispino: "If someone is a problem employee, an employer always has the opportunity to move him or her out."

(Anastasia MacLean can be reached at maclean@businessedge.ca)