Response (Revised) To the Ministry of Labour s consultation paper on Mandatory Retirement. Donna Marie Kennedy President
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1 Response (Revised) To the Ministry of Labour s consultation paper on Mandatory Retirement Donna Marie Kennedy President Greg Pollock General Secretary September 2004
2 TABLE OF CONTENTS 1. Introduction A Popular Concept Advocacy for Teachers Retirement as a Benefit Career Extensions Skills Shortage Disadvantaged Groups Costs Recommendations Sources i
3 The Ontario English Catholic Teachers Association (OECTA) represents 36,000 women and men who have chosen teaching careers in the Catholic schools in Ontario. These teachers are found in the elementary panel from junior kindergarten to grade eight, and in the secondary panel in grade nine through grade twelve/oac in publicly-funded education. The Ontario English Catholic Teachers Association is affiliated with the Ontario Teachers Federation, whose membership numbers 144,000 fulltime, part-time and occasional teachers employed in the publicly-funded elementary and secondary schools of the Province of Ontario. Donna Marie Kennedy President Greg Pollock General Secretary September 2004 ii
4 INTRODUCTION The Ontario English Catholic Teachers Association (OECTA) welcomes this opportunity to present its views on the issue of mandatory retirement and on proposals to change current laws that permit mandatory retirement. OECTA is the legal bargaining agent for the 36,000 teachers in Ontario s Catholic elementary and secondary schools, who work as full time and occasional classroom teachers We congratulate the McGuinty government for inviting depositions and for taking the position that this objective is to be achieved, "without undermining existing retirement rights or entitlements to benefit plans and pension plans." Nor should its achievement undermine future retirement rights, entitlements or pension plans Because many people benefit from mandatory retirement, we fear that an outright ban would be counterproductive. We respectfully suggest that the conditions which stop certain disadvantaged groups, including immigrants and women, from retiring at age 65, can be more effectively addressed through holistic strategies to ensure quality of life, encompassing pensions, affordable housing, the environment and health care, than by a ban on mandatory retirement In principle, we oppose a ban on mandatory retirement, but since the government has announced it intends to proceed with this legislation, we wish to bring forward the following concerns and recommendations. 1
5 A POPULAR CONCEPT Mandatory retirement at age 65 remains a popular concept in Canada despite the intensifying debate. A national Decima survey of 2,000 Canadian adults conducted in 2003 for the Winnipeg-based Investors Group concluded that 26 per cent of Canadians "disagree" with any legislative attempt to ban mandatory retirement. A further 19 per cent "strongly disagree" for a total of 45 per cent Our support for the concept of mandatory retirement is similar to our support for a 40-hour work week. In general, workers should be able to look forward to a secure retirement, normally at age 65, just as they look forward to two days of rest after five days of work. Regardless of decisions by some people to work more than 40 hours in the evening and on weekends, we continue to advocate for the 40-hour work week. We recognize that not everyone is ready and able to retire by 65, but we believe, for the benefit of society, that it should continue to be a goal. 3. ADVOCACY FOR TEACHERS As teacher advocates, OECTA bargains local collective agreements through 80 different sets of local negotiations under the Ontario Labour Relations Act (OLRA) and delivers ongoing contract support and protection. The OLRA requires OECTA to provide fair representation to all members who pay dues and are covered by these 80 collective agreements As organized workers, whose income, working conditions, retirement and pensions are negotiated and protected by a union, teachers are part of an advantaged demographic group. Rather than introducing 2
6 legislation that would prohibit collective agreements from enabling workers to retire at a fixed age with a reliable income, we would prefer that Ontario find ways to ensure that all workers can afford to retire by age Ontario teachers enjoy the benefits of organized workplaces. OECTA encourages the Ontario government to make it easier for unions to organize and negotiate contracts for unorganized workers so that they can improve their incomes, working conditions, job security, and retirement benefits RETIREMENT AS A BENEFIT Currently, no law in Ontario requires people to retire at any age. Instead, Ontario workers are entitled to and do negotiate mandatory retirement into their collective agreements. These workplace policies, practices and collective agreements have served many Ontario workers and their employers well. In their 1988 paper, "The Case for Allowing Mandatory Retirement," Morley Gunderson and James Pesando observe that "mandatory retirement policies tend to cover advantaged workers who earn relatively high incomes in long-term positions, are male, covered by employer-sponsored pension plans, that are protected by collective agreements." 4.02 The members of Ontario s teacher federations, including OECTA, consider their pension plan to be one of the most substantial benefits of their employment and have been vociferous in its defense. We believe that all workers should be able to negotiate mandatory retirement as part of an overall package of pension benefits through their unions. 3
7 4.03 The Ontario Teachers Pension Plan is a defined benefit plan for 155,000 working elementary and secondary teachers and 97,000 pensioners, including survivors. This plan is the result of a mutually agreed contractual arrangement between consenting parties: the Ontario Government and the plan members, represented by the Ontario Teachers' Federation The actuarial planning and assumptions for Ontario s teacher pensions are based on the expectation that most teachers retire at a fixed age. They become eligible for a full pension when their age plus qualifying years of teaching add up to 85. For many teachers it is at age 55. Their fully indexed benefits are integrated with the Canada Pension Plan OECTA would not like to see an increase in the age of eligibility for public pensions We believe that the normal age for retirement should not be raised above Legislation banning mandatory retirement must not be permitted to intrude into collective agreements or undermine pensions and benefits that have been openly and freely bargained between workers and their employers CAREER EXTENSIONS Genuine choice about retirement depends upon whether a worker can afford to retire. This is a more significant factor in the decision to retire than age. 4
8 5.02 For many years, OECTA has fought for the rights of some of its members who wish to continue full time employment beyond age 65. In 1986, before the Ontario Supreme Court, OECTA successfully challenged the Essex County Separate School Board s right to force Ivan Mordawanec, then 68, to retire. Such appeals should be supported by amendments to the Ontario Human Rights Code that would remove the age limitations that people 65 and over (as well as those under 18), have protection against workplace age discrimination Many retired OECTA members return to the classroom as occasional teachers and continue to be active Association members. Though most teachers have retired due to pension entitlements by the time they are 65, the Ontario Teachers Pension Plan permits them to work as much-needed occasional teachers for 95 days each year after retirement. Some continue to serve on local OECTA executives and bargaining committees. The terms that allow them to return to teaching for various school boards after retirement are negotiated by OECTA in local collective agreements SKILLS SHORTAGE One of the arguments put forward to justify banning mandatory retirement is that there is currently a shortage of professionals in many fields, especially health and education. A contributing factor to the shortage of qualified teachers has been Ontario s inability to train enough new teachers and retain them in light of the previous government s education agenda. OECTA urges the government to increase the number of positions available at faculties of education; increase financial aid for student teachers; provide greater opportunities for in-service training; increase investment in public education; and provide education resources, to address the shortage of teachers. 5
9 6.02 As has been mentioned by other presenters, there are many competent but underemployed foreign-trained professionals in Ontario who are unable to work in their chosen fields. We agree that the skills shortage in other professions could be alleviated by addressing the barriers to their employment in their professions DISADVANTAGED GROUPS Some groups of workers, who have endured discrimination due to age, gender, race, or status as immigrants, have particular needs that require attention. Not surprisingly, these people are likely to oppose mandatory retirement. The 2003 Decima survey found that 62 per cent of respondents had concerns about "running out of money after they retire: 32 per cent were somewhat concerned, 20 per cent very concerned and 10 per cent extremely concerned. More than half (52 per cent) of non-retirees without a pension plan said they did not expect to be in a position to choose their own retirement date. Rather, it would be dictated by factors beyond their control." 7.02 As mentioned earlier, the issue is not the justice or injustice of mandatory retirement, but whether they can afford to live without ongoing employment income. OECTA believes that elimination of mandatory retirement would not automatically increase employment opportunities or guarantee living wages to older or disadvantaged workers. The policy question is how to keep these workers fully employed and adequately paid until they retire. 6
10 7.03 Removing age limitations from the Ontario Human Rights Code would better prevent age discrimination for all workers, than introducing legislation to restrict the terms and conditions of employment that organized workers and their employers are entitled to willingly negotiate We recommend pension reforms that would allow more workers to purchase or transfer credit to build better pensions and help those marginalized by breaks in employment or low income in their prime earning years OECTA also recommends that the Ontario Human Rights Code be amended to require all workplaces public and private sector, unionized and non-unionized to adopt anti-discrimination provisions for workers of all ages Some economic disadvantage felt by older workers could also be mitigated by eliminating gender-based wage differences and penalties for women who take time out to raise families. The Pension Benefits Act should be amended to require all pensions to be indexed The Workplace Safety and Insurance Act should be amended so that disability benefits continue for the life of the claimant and are transferable to survivors We urge the Ontario government to lobby the federal government to revise the Canadian pension system to reflect the real economic needs of seniors. In addition to pension reform, investment in affordable rental housing and community services that help citizens of all ages should be increased. 7
11 COSTS As the overall age of the workforce rises, health costs also rise. It is a fact that as workers get older, the more likely they are to collect health insurance. The Employment Standards Act should provide the same safeguards for benefit plans for employees of all ages. Employers should not be able to place groups of retired teachers who face elevated health costs into segregated plans, as they do now Assuming that all employers and employees want to continue employment after age 65, it would be very expensive to maintain all employees benefits at the same level. Many insurance policies have a cessation date for benefits. Life insurance benefits, for example, often change at 65 and long-term disability benefits cannot be renewed after 70. As a major public service employer, we caution that the Ontario government should anticipate higher costs for benefit premiums when more older workers remain in the labour force OECTA recommends increasing spending on health and safety, to accommodate older workers and to monitor implementation of the Employment Standards Act especially the expanded responsibilities of employers. 8
12 OECTA RECOMMENDS THAT THE ONTARIO GOVERNMENT: Protect existing mandatory retirement rights or entitlements to benefit plans and pension plans Protect future mandatory retirement rights or entitlements to benefit plans and pension plans negotiated by unions Ensure that legislation banning mandatory retirement does NOT intrude into collective agreements or undermine pensions and benefits that have been openly and freely bargained between workers and their employers Ensure that all workers are entitled to negotiate mandatory retirement through their union Affirm its support for maintaining the normal age for retirement at Oppose any attempt to increase the age of eligibility for public pensions Remove the age limitations in the Ontario Human Rights Code Amend the Pension Benefits Act to allow employees to purchase or transfer credits Amend the Ontario Human Rights Code to require all workplaces public and private sector, unionized and non-unionized to adopt antidiscrimination provisions for workers of all ages Amend the Pension Benefits Act to require all pensions to be indexed. 9
13 9.11 Amend the Workplace Safety and Insurance Act so that disability benefits continue for the life of the claimant and are transferable to survivors Help Ontario unions organize other workers to improve their working conditions, including retirement benefits SOURCES Canadian Teachers Federation Ontario Teachers Pension Plan Board E0804.pdf Gunderson, Morley. "Banning Mandatory Retirement: Throwing Out the Baby With the Bathwater." C.D. Howe Institute Backgrounder 79 (March 2004) Gunderson, Morley, and James Pesando. "The Case for Allowing Mandatory Retirement." Canadian Public Policy, 14.1(1988): Ontario Federation of Labour, Symposium on Ageism: Aging without Age Discrimination. June Presentation by Keith Norton, QC "Human Rights and the Older Worker." 10
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