By Howard Levitt 

Canadian workplaces are full of Joe Bidens — older employees who are past their prime, show cognitive decline, and are impossible to get rid of

Canadian workplaces are a world of Joe Bidens. Ever since mandatory retirement was abolished, employees no longer come with a handy “best before date,” which allowed employers to avoid years of potential decrepitude among staff.
Worse (or better if you believe this to be good social policy), employers are not even allowed to discriminate against employees when the ravages of age affect their physical or mental abilities. There is an exception in human rights law if a worker is so disabled that continuing their employment would be a genuine hardship, but short of that, an employer has no recourse. If an older employee makes repeated mistakes or their performance is hindered such that it negatively affects the business, they will not have a human rights claim but will still generally be entitled to damages for wrongful dismissal if they were making an honest effort and the problems were occasioned by age related disability. All of this applies to both demotions and dismissals.
We may not have an electoral college system that chooses our CEOs, but corporate leaders in Canada are equally entrenched nonetheless — by their boards, potentially by shareholders and usually by sheer osmosis.

If the CEO runs a private company, there are no barriers to permanence in the position. The only ones to suffer will be the owner, employees and of course suppliers and debtors if the company ultimately goes bankrupt.

Since the end of mandatory retirement, as workers have become older, my office has received more inquiries about how to deal with aging executives, protocols to follow in the future, and how to plan for succession without triggering constructive dismissals. Similarly, we receive calls from employees concerned about their future when they see their employers’ succession plans with someone else’s name in their position (something employers should be wary of doing).

But the strictures are almost as difficult in public corporations, since directors, who have the power to replace the CEO, are often appointed by him or her. The first to put their hand up to say it is time for Sally or Joe to go may find themselves quickly replaced before any groundswell forms. The remaining directors, happy to retain the prestige and remuneration of their board appointments, soon learn the value of acquiescence.

They should be wary. Public or private, directors have a fiduciary duty, not to the CEO but to the company. Directors could potentially be sued if stakeholders become aware the CEO is no longer fully competent and the board failed to raise the issue, ask for medical testing or push for succession.

The same human rights principles apply to employees at all levels. We do not have a dynamic marketplace in Canada, where employees can be demoted or replaced in the interest of efficiency at minimal cost. Every employee so demoted or dismissed is entitled to severance in the range of three to 30 months, short of gross, usually repeated, misconduct after warnings. Gross incompetence is not cause for discharge unless there is a willful element to it. And older employees, by definition, generally receive greater severance because it is more difficult for them to secure alternate employment, age being one of the factors looked at most closely by courts in determining severance.

The irony in Canada is that an older employee who is dismissed or demoted is best off arguing that their performance problems are caused by age-related decline to prove a human rights violation. Ironically, the more the employer asserts a significant decline in cognitive ability or motor skills to justify the dismissal, the stronger the employee’s human rights case becomes, including the possibility of reinstatement.

A question often asked is whether there is any onus on employees to disclose their age-related medical conditions, and can they be fired for not so disclosing? The case law suggests no such obligation exists, notwithstanding one case I won many years ago, Cornell v. Rogers, in which the plaintiff had failed to disclose in an interview that he had previously suffered a nervous breakdown, which the court found as one of many grounds for cause. However, it would depend on the job or position (a bus driver or an airline pilot would be exceptions). If an employee was aware they had a condition, and it could potentially imperil the health and safety of themselves or their coworkers, but they said nothing, that would indeed be cause.

Apart from these few exceptions, workers suffering from senescence, whether CEOs or lower-level employees, are generally protected by Canadian employment law.