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Walt, Alex --- "The Treatment of Age and Age Discrimination in Employment in the United States, Canada and South Africa" [2004] ElderLawRw 9; (2004) 3 Elder Law Review 42


THE TREATMENT OF AGE AND AGE DISCRIMINATION IN EMPLOYMENT IN THE UNITED STATES, CANADA AND SOUTH AFRICA

ALEX WALT[1]

Age discrimination in the workplace occurs in all societies. The aim of this article will be to examine, on a comparative basis, the treatment of age discrimination in various jurisdictions, in particular the United States of America, Canada and South Africa. The relevant legislation will be discussed, as well as the jurisprudence developed by the Courts, particularly in respect of mandatory retirement.

I THE PROBLEM: AN AGEING POPULATION

Over the next few decades, the proportion of elderly people is forecast to increase substantially in all industrialized countries, while the size of the population will decrease. This trend is already evident and is the result of simultaneous increase in life expectancy and a drop in birth rate.

In the United States it is estimated that by 2005, 20% of the population will be over 55, as opposed to only 12.5% in 1990, and that 56% of formal workers in that age group will still be working. Also, by the time the baby boom generation will all have reached 65, which will be in 2011, they will number 75 million of the population and can be expected to live into their eighties.[2]

In Canada, the Department of Statistics indicated that in 1999 the percentage of population 65 and older was 12.4%, but that this figure would double within the next four decades. In the province of Ontario, senior citizens number 500,000, but by the year 2021 this figure would number over 3 million.

Projected population figures for the European Union show a marked drop from a total of 324,884 to 312,593 (excluding projected immigration between the years of 1990 – 2015).[3] One third of the population is currently over 50 and by 2015 this figure is estimated to reach 40%. In addition, in 1990 one person in 13 was over 70 years of age, and by 2015 it will be one person in 9.

The changed demographics in the structure of the population will inevitably necessitate a change in the employment strategies of employers, and an increased burden of responsibility for the elderly, falling on employees in their forties and fifties.

According to the 1996 South African Census, people over 60 years of age constitute 8% of the population, increasing by 3% per year.[4] In South Africa, the problems associated with an ageing population are further aggravated by a high unemployment rate (40%), low skills levels and HIV/AIDS which causes an estimated 600 deaths per day.

II THE UNITED STATES OF AMERICA

A Historical

1 Working Conditions

Age discrimination first arose in the post-industrial revolution period, particularly from the latter part of the 19th century when substantial changes took place in the workplace, with large factories being established originally with workers working long hours such as in the sweatshops of the garment industry, in unpleasant working conditions, or in other factories where pollutions and toxins were always prevalent.

These working conditions were particularly unsuited to the elderly worker. An older worker unable to keep up with the demands of production, or whose physical condition had generally slowed down, was summarily dismissed without any regard for the many years of loyal service that he may have rendered. A 50 year-old worker dismissed for such reasons would, in fact, find great difficulty in finding other work.

In addition, stereotypical prejudices against older workers have been enunciated from the early 20th Century and still exist today that the older worker is slow to learn, set in his ways and finds it difficult to adapt to change.

2 The Courts

The 14th Amendment to the Constitution of the US passed in 1868, protected the immunity of citizens from any State that may affect the rights of citizens without due process of Law.[5]

The 14th Amendment was applied in respect of employment, the leading and much discussed case being Loehner v New York,[6] where the US Supreme Court ruled that legislation introduced by the State of New York limiting the number of working hours for a baker to 65 hours per week, was void as it interfered with the liberty to sell one’s labour and subjecting that liberty to unreasonable restraints.

B Anti-Age Discrimination Legislation

1 Federal Legislation

The reaction to the inequities, and constant breach of human rights in the workplace, resulted in Congress enacting Title VII of the Civil Rights Act of 1 964,[7] which declared certain practices as unlawful such as failing to hire or discharge any individual because of race, religion, colour, sex or national origin.[8] An attempt to include age as one of the factors applicable to Title VII was rejected by both the House of Representatives,[9] and the Senate.[10]

Two events prompted further action by Congress:

a report by the Secretary of Labor to Congress that showed that half of all private job openings were barred to applicants over 55, and a quarter were closed to applicants over 45;[11]
a message to Congress sent by President Lyndon Johnson, pointing out that there was a persistent average of 850,000 unemployed people aged 45 and over, comprising 27 percent of all persons unemployed, and 40 percent of long-term unemployed in the US.[12]

2 The Age Discrimination in Employment Act (1967) (ADEA)

This Act closely followed the approach of Title VII of the Civil Rights Act of 1964, applying the same prohibition to age discrimination.[13] The stated objective was to promote employment based on ability rather than age.[14]

(a) Applicability of the ADEA

Originally, the ADEA only prohibited discrimination in hiring or discharging, and only in respect of enterprises with 20 or more employees, and only in respect of employees between the ages of 40 and 65.

In 1976, the age limit was raised to 75, and in 1986 a mandatory retirement age was completely abolished so that the ADEA is now applicable to all public and private employers with more than 20 employees over the age of 40 employed for each working day in 20 or more calendar weeks in the current or preceding calendar year.

The most fundamental argument in favour of the removal of a mandatory retirement age was that it acknowledged the right of individuals to choose for themselves when to retire from their employment and to give them a reasonable expectation of being secure in their jobs, or at least that if they are to be dismissed then it will not be because of their age.

The decision to prohibit a mandatory retirement age was vindicated by a survey conducted in 1989 by the American Association of Retired Persons of 400 businessmen, which disproved the usually-held stereotype views of older workers. The survey showed that older workers were awarded higher marks than their younger counterparts for productivity, attendance, work performance and commitment to quality, and that they were highly regarded for their experience, knowledge, work-habits and attitudes.[15]

A further example can be quoted from an experience in the UK where the firm B&Q owned the largest chain of do-it-yourself stores in the UK. It staffed a suburban Manchester store with workers over 50. Compared with four other stores in the area, this store had a staff turnover of 16% less and profits that were 18% higher, and 60% less inventory loss through theft, damage, etc.[16]

(b) Exceptions to Prohibition Against Mandatory Age Retirement

The ADEA established several exceptions to mandatory age retirement:

The High Policy Maker Exemption;
Bona Fide Occupational Qualification Exemption (BFOQ);
Reasonable Factors other than Age Exemption (RFOTA);

The High Policy Maker Exemption permitted mandatory retirement at age 65 or older for any executive in a high policy making position who has been in such a position for at least two years prior to retirement, and whose annual benefit would be in excess of $44,000 per year.[17]

(c).Bona Fide Occupational Qualification (BFOQ)

The BFOQ defence begins with a discrimination explicitly based on age and then lays down a valid exception for some special distinction connected with the job that necessitates an age distinction.

In the US where age is claimed as a BFOQ, the cases tend to be based on a contention that the position itself is one that cannot be expected to be held by people above a certain age, or that for reasons of health or public safety the job cannot be done by an older person, such as with airline pilots, public transport drivers, police and fire fighting officers.

In this way, health can sometimes be regarded as a proxy for age in establishing a BFOQ.

(d) Proof of a BFOQ

The strictness with which the BFOQ rule is applied is well illustrated in the decision of the US Supreme Court in Western Airlines v Criswell.[18] The contention of the employer that all their flight engineers must retire at age 60 for reasons of public safety, was rejected on the grounds that the employer already tested pilots and first officers before demanding their retirement and so there was no reason why the same rule could not apply to flight engineers as well. Consequently, a defence of a BFOQ could not be raised in respect of mandatory retirement at 60 for flight engineers.

In this case, the Court laid down a two-pronged test to determine the validity of a BFOQ defence:

that what is being requested is reasonably necessary to the essence of the business and not merely that it would be convenient;
that an attempt to establish the same essentiability by assessment of individual capabilities would be impractical or pointless. The employer must be able to show that all, or at any rate most, of the employees being excluded because of age cannot perform the duties in question and that individual testing would not be possible.

In Usery v Tamianni Trail Tours Inc., the decision of the bus company not to hire persons over 40 as drivers,[19] was accepted on the grounds that many persons over that age had passenger endangering characteristics that could not be determined practically by a test. Consequently, chronological age was in this case regarded as a proxy for health.

Similarly in EOC v New Jersey,[20] mandatory retirement for police officers was accepted by the Court on the grounds that police work which could possibly include chasing felons on foot, would be too rigorous for employees over 55 in the police department.

(e) Reasonable Factors Other Than Age (RFOTA)

ADEA, in the same sentence that provides for a BFOQ also provides that an employer may take any actions under ADEA for good cause “where the diferentiation is based on reasonable factors other than age” (RFOTA).

RFOTA factors could be poor job performance, business cut-backs known as reduction in force (RIF) and costs. In instances where an RIF has taken place, the employer’s business reasons are not in question as this is part of managerial prerogative, but if the RIF is a sham or if the employer in a legitimate business cut-back uses age to decide which employees to discharge, then the employer’s RFOTA may be considered a mere pretext for age discrimination.

An example where RFOTA was held to be a mere pretext for age discrimination occurred in Metz v Trans-Mix Inc.[21] In this matter, Wayne Metz at age 54 was, during a slump in the construction industry, after 27 years of service replaced by a 43 year old plant manager who at the time only had 17 years service. The employer maintained that the dismissal was based on a reduction in costs due to Mr Metz’s high salary. The Court held that the employee’s high salary resulted from his 27 years of service and annual increases that he had received even when the company was sustaining losses. In such circumstances, it was held that the employer was using salary as a proxy for age and that this was the very discrimination that the ADEA was intended to address.

(f)Reduction in Force and Age Discrimination

In the United States, a reduction in force may be conducted on a voluntary basis in which case the employees are offered an inducement to take early retirement. If done on a bona fide basis and the workers voluntarily accept a financial inducement to leave the company, then no breach of the ADEA statute will have been committed.

Decisions of US courts on the subject of an RFOTA defence are not consistent. In Bay v Time Mirror Magazines Inc.,[22] the employer restructured his operations and as a result Mr Bay, who at the time was 54 and earning US$200,000 per year, was replaced by a 35 year-old earning US$85,000. In contrast to the Metz decision, Bay’s age discrimination suit was dismissed, the Court stating: ‘To be sure high salary and age may be related but so long as the employer’s decisions are based solely on financial considerations, its actions are not barred by the ADE’.

(g)Burden of Proof: Disparate Treatment and Disparate Impact

The effectiveness of the ADEA in achieving the objectives of the Act cannot be measured without satisfying the onus of proof as laid down by the Courts for these cases, although there has been no uniformity in the rules as laid down by the several Courts in the United States.

Claims arising under disparate impact involve employment practices that are ostensibly neutral in their treatment of different groups but bear more seriously on one group than another and cannot be justified by business necessity.

In the United States the disparate treatment method of proof has always been available under the ADEA, such as when evidence is led of direct statements that the employer is ‘looking for a younger person’ (direct discrimination), coupled with a decision adverse to a protected member, but the applicability of disparate impact (indirect discrimination) to the ADEA has been less certain.

The rules of proof were laid down followed in Texas Department of Community Afairs v Burdine,[23] and applied in discrimination cases for several decades. The Court laid down that the employee had to establish a prima facie case establishing a presumption of discrimination. The employer must then produce evidence for rejecting the employee’s submissions but it does not have to prove the truth of its reasons as it need only verbalise an explanation. Even a light explanation given by the employer would at this stage be acceptable. This is because the burden of persuasion at all times remains with the plaintiff while the procedure swings between the two parties.

Thereafter the plaintiff has the opportunity to show that the explanation as offered by the defendant was a mere pretext and that in fact his dismissal was discriminatory.

(h)Statistical Evidence

In the United States, an employer planning an RIF will often develop a detailed layoff and job elimination procedure not only to deter management personnel from making discriminatory selections for termination, but to minimise the appearance of age discrimination in the implementation of the RIF when the RIF is analysed from a statistical point of view. In many companies an RIF could result in a disproportionate number of job eliminations in the forty-plus group of employees, and this usually results in a dramatic lowering of the average age of the workforce with a possible presumption of age discrimination, and in several cases statistics are used to prove disparate impact.

In EEOC v Doremus & Company, Anthony Quinn worked for the company for 25 years rising to the position of senior vice-president. Two Reductions in Force were implemented with Quinn’s services being terminated during the second.

Quinn charged Doremus with age discrimination and showed that in the period between the two reduction in force programmes, Doremus had hired or promoted five workers to the account executive position of whom two were twenty-five, one was thirty-four, and two were thirty-nine. The employer claimed that it was dismissing Quinn for financial reasons and promoting for the same reason workers on average twenty-six years younger than Quinn. Before the first RIF was initiated, the average age of the account executives was nearly fifty but by the time Quinn was dismissed the average age had been reduced to thirty-nine. The Court held that this reduction in the average age was sufficient on which to draw an inference that age discrimination played a major role in the implementation of the RIF’s.

(i) Disparate Impact

In 1991, Congress introduced the Civil Rights (indirect discrimination) Act of 1991,[24] introducing amendments to Title VI which certified the disparate impact test and clarified the burden of proof. Once the plaintiff has shown disparate impact the employer must bear the burden of proof and persuasion, and show that the practice is job related for the position in question and consistent with business necessity.

Congress did not specifically include the ADEA in the amendments to Title VI. Also, decisions in two other cases heard about this time had far-reaching effects and have made the burden on an employee endeavouring to prove age discrimination even more difficult.

In St Mary’s Honor Center v Hicks,[25] the Supreme Court decided that the jury’s rejection of the employer’s reasons for its actions does not compel the jury to find in favour of the worker and that it is not enough merely to disbelieve the employer, the jury must still find that the employer intentionally discriminated against the worker. Previously, proof that the employer had given false reasons for the dismissal was sufficient to presume discrimination and resulted in a favourable decision for the employee. Now, following Hicks case, the jury may infer a discriminatory motive on the part of the employer but is no longer compelled to do so. The jury must still find a discriminatory intention on the part of the employer. This places a far greater onus of proof on the employee because of the difficulty of obtaining direct evidence of actual discrimination.

In Hazen Paper Company v Biggins,[26] the Company hired Biggins in 1977 but terminated his employment in 1986 when he was sixty-two years old. In this company the company’s pension plan had a ten-year vesting period and Biggins’ employment was terminated within a few weeks of when he would have reached the ten-year mark at which stage his pension rights would have vested. Biggins claimed that the Hazens were guilty of age discrimination by firing him to prevent him vesting in the pension plan.

The majority judgement was given by Justice O’Connor with Chief Justice Rinquest with Justice Thomas concurring and Justice Kennedy giving a separate concurring judgement.

The court held that seniority and age are unrelated and that there is no disparate treatment (direct discrimination) when the factor motivating the employer is some feature other than the employee’s age. In the words of Justice O’Connor: ‘The ADEA only requires an employer to ignore an employee’s age ... it does not specify further characteristics that an employer must ignore’. In this case the services of the employee were terminated so as to save costs to the Company and a younger person could equally have been dismissed for the same reason and neither dismissal would have been based on age.

In theory, the distinction between age and seniority as enunciated by the Court could be correct but in practice it is submitted that the typical employer and his staff are unlikely to adhere to such a distinction particularly as in most cases age and seniority do, in fact, coincide. As selection on the basis of age would contravene the ADEA, the employer wishing to terminate the services of older workers will most likely use seniority as a proxy for age in selecting employees for termination.

Since Hicks and Hazen, the scope of the age proxy doctrine has been substantially narrowed. A worker must now be able to prove that the employer intentionally discriminated against him on the basis of his age (by disparate treatment) and this would be most difficult to prove.

(j) Fair Employment Practice Law

As the judges in Hazen Paper did not express a view as the applicability of disparate impact evidence, the lower courts have continued to be divided over whether the provisions of the 1991 Act applied to the ADEA.[27]

However, in the State of California, a provision has been introduced providing that where an employer’s policy or practice has a disparate impact on employees over 40, even without intentional discrimination, the employer may be liable for age discrimination.[28]

3 Has the ADEA Been Efective?

The effectiveness of the ADEA is usually given as the reason for the substantial reduction in the number of claims filed under the ADEA. According to statistics filed by the Department of Labor, in 1970 500,000 job opportunities for older workers were made available by the elimination of discriminatory practices. In 1973, the figure was 106,000, and in 1976 31,964.[29] In addition, the Employment Equal Opportunity Commission reported that in fiscal year 1986 59,328 charges of unlawful discrimination were filed with the agency of which 18.6% were ADEA charges. Ten years later in 1996, there were 15,719 charges of which 20.2% were ADEA claims.[30]

Some critics claim the ADEA merely camouflages the incidence of age discrimination in employment as employers:

now abandon blatant age discrimination;
adopt more subtle forms of discrimination such as early retirement incentives, RIF and RFOTA initiatives;
refrain from giving any obvious reasons for failing to hire an older job applicant while job seekers invariably do not have the financial resources to prove the unfair discrimination;
by making sure that when employees are laid off, that no more employees over 40 are dismissed than those under 40.

In actual fact, by cutting down on the number of dismissed older workers and shortening the length of time that they remain without work, the ADEA can be regarded as serving a very distinct and effective purpose as the impact of the ADEA, and the costs of litigation, as well as the changing attitudes of employers towards the older worker have contributed towards reducing discriminatory practices resulting in increased job security for older workers.

Nevertheless, the old stereotypes of the jaundiced attitude towards the older worker still remain, despite studies that convincingly suggest that the older worker is equally as efficient and effective as his younger counterpart. [31]

III CANADA

Like the United States and South Africa, Canada also provides protection from age discrimination in employment. This is enacted on a Federal level as well as by each of the 14 provinces separately.

A Legislative Prohibitions

Except for the Provinces of Nova Scotia, Northwest Territories, Nunavut, Prince Edward Island, Quebec and Yukon Territory which have followed the Federal legislation and stipulated no minimum nor maximum age ranges, the remaining provinces all stipulate a minimum or maximum age, or both, for protection from mandatory recruitment and retirement in employment.

B The Canadian Charter of Rights and Freedoms

The Constitution of Canada is known as The Canadian Charter of Rights and Freedoms,[32] and provides for equality rights and equal benefit of the law without discrimination and includes ‘age’ among the grounds mentioned for particular protection. The Constitution of Canada clearly states:

Every individual is equal before and under the law and has the right to the equal protection and equal benefit of the law without discrimination based on race, national or ethnic origin, colour, religion, sex, age or mental or physical disability.[33]

1 Canadian Human Rights Decisions on Mandatory Retirement

The validity of the minimum and maximum age limits as provided for in provincial legislation have sometimes been challenged as being in conflict with section 15 of the Canadian Charter of Rights and Freedoms which fixes no minimum nor any maximum ages within which protection against discrimination is provided.

In McKinney v University of Guelph,[34] eight professors and a librarian aged 65 employed at four different Ontario Universities challenged their compulsory retirement at age 65. The applicants challenged the validity of the University’s retirement policy in terms of section 15 of the charter, maintaining that compulsory retirement at age 65 contravened their rights to equality.

The majority judgement defined discrimination

as a distinction whether intentional or not based on grounds relating to characteristics of the individual or group not imposed on others, or which withholds or limits access to opportunities, benefits and advantages available to other members of the society.

On the basis of this definition of discrimination the retirement policy would be discriminatory and contrary to section 15(1) of the Charter.[35]

The Court then considered whether the policy of mandatory retirement at age 65 could be justified under section 1 of the Charter which guarantees the rights and freedoms set in the Charter only “within reasonable limits justifiable in a democratic society”. To do so the Court applied the analysis laid down in an earlier case of R v Oakes,[36] namely:

proportionality;
rationality; and
minimum impairment of the rights of others.

In the case of the University it was found that objectives of the policy accorded with the exceptions provided for in section 1 of the Charter and that these objectives were described as ‘pressing and substantial’ and that mandatory retirement enabled the University to permit faculty renewal. It also helped the University to plan allocation of its resources making space for newer and younger members.

In addition it preserved academic freedom by eliminating the need for elaborate evaluation schemes which could impair human dignity. There was thus a rational connection between the policies and objectives to be achieved. As regards the issue of impairment, the Supreme Court of Canada held that the policy impaired the rights of others as little as possible because mandatory retirement was not wholly detrimental to the group affected and accordingly the Court held that the mandatory retirement policy of the University was not in conflict with section 15(1) of the Charter.

2 The Ontario Human Rights Code

The Court in McKinney, also considered the situation of the Ontario Human Rights Code, and whether the Code was possibly in conflict with the Canadian Charter of Rights and Freedoms, as section 10(1) of the Code only protects employees between the age of 18 and 65.

The Court again applied the Oakes test to determine the constitutionality of this section of the Ontario Code and whether it contravened section (1) of the Charter. The Court found that the policy of mandatory retirement was introduced with private and public pension schemes in mind.

The objectives of this section of the Code were therefore to preserve the integrity of the pension plans and to increase the prospects for younger workers. Consequently, the objectives of the Ontario government in passing section 10(1) were pressing and substantial and minimally impaired the equality rights of older workers.

C Bona Fide Occupational Requirement

The central issue in age discrimination cases before human rights tribunals and courts has been the Bona Fide Occupational Requirement defence (BFOR sometimes also referred to as BFOQ).

In Canada as in the United States, a bona fide occupational requirement is a valid defence to a charge of discrimination on the basis of age.

The Supreme Court of Canada in the Etobicoke case,[37] considered the policy of mandatory retirement of fire fighters at age 60, and established what must be satisfied to establish a BFOR.

A mandatory retirement at a fixed age must be imposed honestly, in good faith and in the sincerely held belief that the limitation is imposed in the interests of adequate performance of the work and not for ulterior motives aimed at objectives which could defeat the purpose of the Code. The second element requires an assessment as to whether the retirement plan is reasonably necessary to ensure the efficient and economical performance of the job without endangering the employee, other employees or the public.

In the case of police officers or fire fighters the Supreme Court of Canada held in the Saskatchewan Fire Fighters case,[38] that individualised testing if practicable was always preferable but where impractical then the employer may support its policy with more generalised evidence. This decision is in keeping with similar decisions in the United States.

The principles laid down in age discrimination cases in Canada do not always follow the same policies, particularly in respect of decisions taken in the various Provinces. They may however, be summarised as:

Mandatory retirement of an age group not protected by the relevant human rights legislation is not discriminatory.
Mandatory retirement within protected age groups is discriminatory unless a BFOR or BFOQ defence can be established.
Mandatory retirement in certain occupations such as pilots or soldiers may be justified as a BFOR but the employer must show that non-retirement will cause a ‘suficient risk of employee failure’ great enough for the employee to be unsuitable for the job.
Where individual testing is not an absolute requirement of a BFOR the onus is on the employer to show that it could not test individually without undue hardship.

In Canada therefore, the exceptions to permissible exceptions to mandatory retirement are far narrower than the USA and concern public safety, whereas in the US, factors such as a reduction in force or reasonable factors other than age are accepted permissible factors for mandatory retirement.

D Do the Canadian Human Rights Act and the Charter Achieve Their Objectives in Respect of Age Discrimination?

In April 1999 an independent panel was appointed to review the Canadian Human Rights Act which had not been reviewed since its introduction in 1977. The panel reported back in August 2000.

Among the views expressed by the Panel were:

there is very little evidence to justify a relationship between age and job performance;
older workers do as well as younger workers in terms of flexibility and creativity, with lower accident rates and less absenteeism, although there may be a fall-off in physical capacity and slower reaction times;
mandatory retirement takes away from the worker the freedom of choice as to when he should cease working;
mandatory retirement may force older people into poverty if they have been unable to save sufficiently for their old age;
the panel recommended that there should be no blanket defence for mandatory retirement other than a bona fide occupational requirement;
the panel did not believe that mandatory retirement necessarily increased job opportunities for younger Canadians.

E The Changing Attitude of the Courts

The trend referred to in the recommendation of the Panel challenging the effectiveness of, or the necessity for, a mandatory retirement policy has now been taken up by the Courts.

In a recent case, Greater Vancouver Regional District Employees’ Union v Greater Vancouver Regional District,[39] the British Columbia Court of Appeal challenged merely accepting that the McKinney decision, approving mandatory retirement at the normal retirement age (laid-down as age 65) was applicable in all instances. The Court emphasised per Judge Prowse that:

Since it is now 11 years since McKinney was decided, and since the issue of mandatory retirement is one of considerable importance and concern in our society, I respectfully suggest that the time for revisiting is upon us.

The majority decision then concluded that mandatory retirement cannot merely be accepted as being permissible but must be justifiable under the Charter in any particular instance, and must satisfy an ‘urgent and pressing need’, and be in accordance with rationality and the minimum impairment of the rights of others, and must be decided on the merits of the case.

Judge Prowse ended her judgement by appealing to the Supreme Court of Canada to revisit the issue of mandatory retirement generally.

There is therefore a distinct trend in Canada at the moment towards abolishing entirely permissible mandatory retirement.

III SOUTH AFRICA

South Africa has a history of racial and gender discrimination going back 300 years. Prior to the establishment of a democratic government in South Africa in 1994, labour relations were regulated on strict racial lines, with the objective of originally exclusively and later to a lesser degree, protecting the interests of white employers and their white employees.

One of the early statues governing labour relations was the Industrial Conciliation Act of 1924, which established industrial councils to settle disputes between employer organisations and white trade unions.

African workers were excluded from the protection of the statute by excluding pass-bearing Africans from the definition of an employee. Later, black women were excluded and mixed unions catering for both black and ‘coloured’ workers became prohibited.

Following continued industrial unrest from the early 1980’s, blacks began to be included in the industrial protection system by permitting the establishment of Black Trade Unions and the establishment of the Industrial Court that developed the jurisprudence of unfair labour practice which was originally defined as ‘any practice which, in the opinion of the Court, is an unfair labour practice’.

Decisions of the court varied and usually ruled in favour of employers and white workers. Nevertheless, political and industrial pressures gradually led to a more equitable basis to the decisions of the court and to recognise the rights of black workers as well.

Consequently, in 1988, the court held that wage discrimination based on factors other than skill and experience constituted an unfair labour practice.[40] In 1990, a decision of the court held that ‘the separate but equal’ doctrine that was the theoretical basis of the apartheid policy of several successive South African governments for several decades, was in itself inherently unequal.[41]

A democratic government was established in 1994, with the inauguration of Mr Nelson Mandela as President, and a final constitution was adopted in 1996. The new constitution made clear the intention to disengage the new South Africa as soon as possible from the baggage of its racial and discriminatory past, with the preamble to the constitution clearly stating the principle objective ‘to heal the divisions of the past, and to establish a society based on democratic values, social justice and fundamental human rights’.[42]

A The Constitution

The right to equality and to human dignity was recognised in the very first section of the Bill of Rights, with the right to equality being the first of the rights to be provided for in the new Constitution. Everyone was to be equal before the law, with the right to equal protection and benefit of the law.[43]

In view of the past history of South Africa it could be expected that the constitution would provide for special protection for sections of the population who suffered most in the past from the country’s discriminatory history.

Accordingly, neither the state nor any person may unfairly discriminate, directly or indirectly against any person on one or more of 17 listed grounds such as race, gender, sex, colour, disability, religion, age.[44]

In the sphere of Labour Relations, the constitution also grants ‘everyone the right to fair labour practices, to join employee organisations or trade unions, and to participate in the activities of such organisations, and every worker is given the right to strike protected by the Constitution’.[45]

B The Labour Relations Act

One of the first priorities of the new government was to rewrite the country’s labour legislation. A new Labour Relations Act was introduced,[46] which provides that employers may only dismiss an employee for a fair reason and following a fair procedure, and related to the employee’s conduct, capacity or for operational requirements.[47]

An employee dismissed due to discrimination on certain grounds listed will have been subject to an automatically unfair dismissal. These grounds are similar to the listed grounds that appear in Section 9 of the Constitution and include ‘age’[48] as well as ‘family responsibility and political opinions’.

The constitutionality of the listed grounds was considered by the Constitutional Court in Harksen v Lane No and Others.[49] The court held that the specified grounds, including age, are based on criteria that have resulted in patterns of disadvantages that have been only too visible in South Africa over the years, and have the potential to demean persons in their inherent humanity and dignity and as such, accord with the equality clause in the SA Constitution.

1 Exception to the Prohibition of Unfair Dismissal Because of Age

An exception to the prohibition of unfair dismissal because of age has been provided in the Labour Relations Act.[50]

In Section 1 87(2)(b) of the Labour Relations Act, ‘a dismissal based on age is fair if the employee has reached the normal or agreed retirement age for persons employed in that capacity’.

There have so far, been eleven cases alleging age discrimination that have appeared before the Courts or Tribunal under the earlier Act as an unfair labour practice, or under the 1995 Act as an unfair dismissal in terms of s187(2)(b).

All these cases have concerned employees who have worked beyond their agreed retirement age, or beyond what would be ordinarily regarded as the normal retirement age for persons employed in that capacity. The Courts have usually ruled that when employees reach the agreed retirement age under a fixed-term contract, then they are not dismissed, but that their employment can be terminated without any consultation whatever.

The problem arises when the employee works beyond the agreed age with explicit or tacit consent of the employer. In most cases, the South African courts have held that the employer has not waived the termination option and that dismissal on these grounds can still take place without consultation, even if this happens to be several years later.

However, where the employee is being retired after reaching what is regarded as the ‘normal’ retirement age for a person employed in that capacity, which seems to be generally accepted as the age of 65, the courts have so far differed on the procedure to be followed. Most courts have insisted that in such cases a fair procedure must be followed.

In the United States, the aim of the ADEA at the time of its introduction was ‘to promote employment of older persons based on their ability rather than age’. In the changed demography of the past few decades, the tendency is now established to adapt policies that tend to keep the older worker at his job. The fall in population, the impending bankruptcy of the social security system, and the general shortage of skills, has made this necessary in both the United States and Europe.

In South Africa, with 40% unemployment the situation is not the same. Far from mandatory retirement being prohibited in South Africa, the legislation anticipates and acknowledges a fixed retirement age and the termination of the employee’s services on his reaching the agreed or ‘normal’ retirement age for persons employed in that capacity is perfectly legitimate.[51]

2 Mandatory Retirement and the SA Constitution

The constitutionality of permissible mandatory retirement as provided for in the Labour Relations Act, has not as yet been tested by the Constitutional Court and could still be held to be unconstitutional.[52] This was the situation in Canada in the McKinney case, but the Canadian Court held that mandatory retirement was justified on the basis of ‘proportionality’ and ‘rationality’ and with ‘minimum impairment of the rights of others’. A similar decision could equally be reached in South Africa in terms of section 36 of the Constitution as a ‘right, reasonable and justifiable in an open and democratic society based on human dignity, equality and freedom, taking into account all relevant factors’.

C Fair and Unfair Discrimination

Viewed from the perspective of other jurisdictions, the concept of ‘fair’ and ‘unfair’ discrimination might seem strange, but it could be expected that, in view of the past discriminatory society that existed in South Africa, legislation would be necessary to provide for special protection for sections of the population previously disadvantaged, such as the black and coloured population, women and the disabled. Discrimination in favour of these sections of the population executed in accordance with a long-term draw-up plan, could well be held to be non-discriminatory,[53] as it aims to achieve equality among the whole population and to compensate for the unfair advantages previously enjoyed by whites.

D South African Case Law

Currently all age discrimination cases have focussed on mandatory retirement either on the basis of the employee having reached or exceeded an agreed retirement age or the so-called normal retirement age for persons employed in that capacity. Unfortunately, in determining age discrimination cases, the courts are not always consistent in their decisions.

In Schmahmann v Concept Communications Natal (Pty) Ltd.,[54] the company had no mandatory retirement age but suggested to their employee that she should retire on her 65th birthday, which she did.

The issue in this case was that the employee believed that as there was no policy on mandatory retirement age in this company, she would be employed for an indefinite period to be terminated at some indefinite time in the future by incapacity.

The employer on the other hand, believed that age 65 was the normal retirement age for persons employed in that capacity, and that accordingly, in terms of Section 187 2(b),[55] the service of the employee could be terminated.

The Court, after extensive discussion on the various meanings of dismissal as they appear elsewhere in the Act, decided that a termination based on Section 187 (2)(b) was not a dismissal but a termination of employment by effluxion of time and as this was not a dismissal that there was no entitlement to a fair dismissal procedure.

In Gquibitole v Pace Community College, [56] the employee who had been a teacher at the college for 8 years received a letter at age 68 that she was being retired in terms of Section 187 (2)(b) of the Labour Relations Act.

The court found that there was no mandatory retirement policy at the college, and that there were other employees at the school aged 72. As such, section 187 (2) (b) was not applicable at the school, and that her present dismissal was an automatically unfair dismissal based on her age. As such, the Court ruled that the applicant was to be reinstated in employment until the date fixed in the retirement insurance policy.

IV CONCLUSION

There are two main manifestations of age discrimination:

stereotypical attitudes;
mandatory retirement.

In the UK, a government survey identified that the most common mentioned form of discrimination both by older and younger employers was age bias.[57]

An additional UK government survey found that forced retirement was the most prevalent form of discrimination, followed by age discrimination in recruitment, training and promotion.

The present changed demographics with an anticipated disproportionate number of older persons compared to their younger counterparts, will create problems both in the workplace and pension funds and could result in:

higher taxes on workers and higher social security contributions from employers;
a strain on existing security finances is already being experienced in the US and Germany;
a demand for older workers to continue working.

A Stereotypical Attitudes

As has been shown, legislation is insufficient to change ‘peoples’ attitudes. Despite the permitted exceptions in the US and the stringent burden of proof on employees, employers in the US still resort to covert forms of discrimination such as:

tempting offers of early retirement;
dismissal on basis of seniority and not of age;
not providing opportunities for older employees to acquire additional training or to learn new skills such as computers;
statistical discrimination that presumes every employee over a certain age possesses actual or potential age disabilities whether this is factually so or not;
animus discrimination which can only be overcome by educating employers to break down stereotypical perceptions of older workers. Both Ireland and the UK have undertaken educational programmes for this purpose.
In the US, by ensuring that the number of employees over 40 years that are dismissed are the same as the number under 40.

B The Elimination of Mandatory Retirement

From the point of view of the employer, mandatory retirement robs him of his most experienced employees at a time where their skills are at a peak.

Older employees have been proved to be usually more reliable, consistent and committed to their jobs and can perform as well as their younger counterparts, except for physical effort.

Although salary costs are reduced when an older employee is replaced by someone younger, the costs of training and developing the younger employee often far outweighs the savings made.

There is a distinct human rights imperative for society to recognise the contribution made by older workers in helping to raise the living standards of the community in which they live.

In the US, the ADEA has not solved all the problems of age discrimination but the legislation does still protect older workers from arbitrary or unjustified dismissal simply because of their age.

From the point of view of the employee:

many cannot afford to retire because of family and financial obligations;
many are still fit and well and enjoying their work. Cessation of work could result in boredom, depression, a sense of inadequacy and eventually, in ill health;
the retirement may necessitate a reduced standard of living. 1 The South African Situation

In South Africa, the problem is how to balance the dearth of jobs against a backdrop of a 40% unemployment rate with the rights of the elderly workers to continue employment at their discretion. In the absence of an effective social security system for the aged, it is almost impossible to do so, except for the high income earners who may be retiring on a reasonable private or company pension.

In such a climate, aggravated by a high rate of deaths in the population between the ages of 30 – 50 as a result of HIV/AIDS, the country does not need a mandatory retirement provision. All problems associated with mandatory retirement could be solved through existing dismissal provisions such as for the inherent requirements of the job, conduct, incapacity or for operational requirements and, in every case, only with prior consultation.

In either set of circumstances where termination has taken place as result of a fixed contract, or because the employee has reached the ‘normal’ retirement age, consultation should be compulsory. It is essential to ensure that the terms of the contract and of the termination, have been adhered to, and that the employee has no reason for believing that he or she was given a valid expectation that the contract would be renewed or extended.

Even where a fixed term written contract exists, there are several matters concerning fair labour practices that need to be considered, such as, whether a valid agreement for termination did in fact exist, or whether the employee had been, for any other reason, discriminated against, or whether the employee had, during the course of his employment, acquired a reasonable expectation that his employment would be renewed.

2 An Alternative to Mandatory Retirement - Inherent Requirement of the Job

In South Africa a dismissal may be fair if it is based on an inherent requirement of the job. There are only a few cases that have till now come before the courts. The permissible South African exception of the ‘inherent requirements of the job’ would be sufficient to accommodate the maze of exceptions and accord with the practices followed in the United States,[58] Canada,[59] and Australia.[60] Public safety in professions such as fire fighters, law enforcement officers and pilots of commercial aircraft, could fall under the inherent requirements of the job parameters. The wording of section 18 7(2) (a) gives sufficient flexibility for it to be adapted to any necessary set of permissible BFOQ circumstances.

The complete withdrawal of section 187(2)(b) and the insistence of consultation in respect of all dismissals or terminations would bring South Africa in line with current practice in most Western countries, such as the United States, Ireland, Australia and New Zealand. Members of the European Union countries will be obliged to introduce age legislation prohibiting discrimination by not later than December 2006,[61] although in Germany the prohibition was introduced in December 2003.[62] The United Kingdom has chosen December 2006 for its effective date.[63]

In addition, dismissal or termination of employment could still effectively be carried out in terms of the LRA for incapacity, misconduct, or for operational requirements, without blatant intrusion of human rights entrenched in an enlightened Constitution, while exceptions to the prohibition of mandatory retirement regarded as necessary are all effectively covered by the exceptions permissible in respect of the inherent requirements of the job.[64]

It is submitted that the indignity of mandatory retirement being inflicted on an employee willing and able and probably needing to work, can never be overcome. It can be tempered through staggered retirement carried out over a period of years, by part-time employment, or through training for other employment. It can possibly be justified under section 36 of the Constitution,[65] in the same way as was done in Canada in McKinney,[66] for an urgent and pressing need, on the basis of proportionality, and only for a rational reason, with minimum impairment and effect on the rights of others. But on its own, it can never be justified as a constitutionally fair labour practice.

ABBREVIATIONS

ADEA
Age Discrimination in Employment Act (1967)
BCCA
British Columbia Court of Appeal
BFOQ
BFOR
Bona Fide Occupational Qualification
Bona Fide Occupational Requirement
CC
Constitutional Court (South Africa)
CHRR
Canadian Human Rights Reports
EOC
Equal Opportunities Commission
FEP
Fair Employment Practices Cases
ILJ
Industrial Law Journal
LAC
Labour Appeal Court (South Africa)
RFOTA
Reasonable Factors Other Than Age
RIF
Reduction in Force
SACCAWU
South African Commercial Catering and Allied Workers’ Union

BIBLIOGRAPHY

1 Articles/ Books/ Reports

Author unknown, Issues and Controversies- Age Discrimination, downloaded at May 20 1999 Gregory, RF, Age Discrimination in the American Workplace (2001).

Hepple, B ‘Age Discrimination in Employment – Implementing the Framework Directive’, 2000/78 IPPR Seminar (Dec 2000).

Institute of Employment Rights, Achieving Equality at Work.

Olivier, M, Smit, N and Kalula, E, Social Security Law – A Legal Analysis (2003) Seagrave, K, Age Discrimination by Employers (2001)

Schmidt, MJV ‘The Need for Modernising German Labour Law Arising from Ban on Age Discrimination’ (unpublished article).

United Nations Commission for Social Development, Draft International Strategy for Action on Ageing (2001)

US Equal Opportunities Commission Report (2000). US Senate, Special Report on Ageing (2000).

2 Case Law

Bay v Time Mirror Magazines Inc, 936(F) 2(d) 112 (2nd Cir 1991).

Chamber of Mines of SA v Council of Mining Union [1990] 10 ILJ 52 (LAC). EEOC v Doremus & Company 69 FEP cases 449 (SDNY 1995)

EOC v New Jersey, 6201 Supp. (DW) 1985.

Etobicoke (Borough) v Ontario Human Rights Commission [1982] 1 SCR 202.

Goldman v First National Bank of Boston [1993] USCA11 22; 985 F.2 (d) 1113(1st Cir. 1999).

Gquibitole v Pace Community College (1999) 30 ILJ (1270) (LC).

Greater Vancouver Regional District Employees’ Union v Greater Vancouver Regional District BCJ No 2026 [2001] BCCA 435.

Harksen v Lane No [1997] ZACC 12; (1998) (1) SA 300 (cc) 323.

Hazen Paper Company v Biggins US 604 (1993).

Johanne v Rand Milling and Mining (1995) 16 ILJ 1249 (LC).

Lochner v New York [1905] USSC 100; 198 US 45 (1905).

McDonnell Douglas Corp v Green [1973] USSC 103; 411 US 792 (1973).

McDonnell Douglas Corp v Green, [1973] USSC 103; 411 US 792 [1973].

McKee v Hayes-Denna Inc. 1992 17 CHRR D/79.

McKinney v University of Guelph [1990] CHRRD/1 13.

Metz v Trans-Mix Inc. 828 F 2(d) (6th Circ 1987).

Qantas Airways Limited v Christie [1998] HCA 18. R v Oakes [1986] 1 SCR 103.

Saskatchewan (Human Rights Division) v Saskatchewan (City) 1989 11 CHRR D/204.

Schmahmann v Concept Communications Natal (Pty) Ltd. [1997] 8 ILJ 1333 (LC).

St Mary’s Honor Center v Hicks [1993] USSC 94; 509 US 502 (1993).

Texas Department of Community Afairs v Burdine [1981] USSC 42; 450 US 248 (1981).

Usery v Tamianni Trail Tours Inc. 531F.2 (d) 224 (5th Cir.1976).

Western Airlines v Criswell [1985] USSC 161; 472 US 400 (1985).

3 Legislation

Age Discrimination in Employment Act of 1967, 29 USC 623

Constitution Act 1982, being Schedule B to the Canada Act 1982 (UK) c 11.

Constitution of the Republic of South Africa Act: Act No 108 of 1996.

Employment Equity Act: Act 55 of 1998 (South Africa)

Industrial Conciliation Act: Act 11 of 1924 (South Africa)

Labour Relations Act: Act 66 of 1995 (South Africa)

Ontario Human Rights Code (Canada)

Title VII of the Civil Rights Act (1964) as amended.


[1] Centre for International and Comparative Labour and Social Security Law, Faculty of Law, Rand Afrikaans University.

[2] Author unknown, Issues and Controversies- Age Discrimination, downloaded at May 20 1999

[3] Statistics issued by the European Commission 1993 and quoted by I Glover and M Branine, Ageism in Work and Employment (2001) 238.

[4] M Oliver, N Smit, E Kalula, Social Security Law – A Legal Analysis (2003) 239.

[5] Amendment 14 of 1868, ‘No State shall make or enforce any law which shall abridge the privileges of immunities of citizens of the United States nor shall any State deprive any person of life liberty or property without due process of Law; nor deny to any person within its jurisdiction the equal protection of the Law’.

[6] [1905] USSC 100; 198 US 45 (1905).

[7] Stat. 253-56 (1964) modified as amendment at 42 USC.

[8] S703 (1) (1) (2) of Title VII.

[9] by 100 Votes to 94.

[10] by 63 votes to 28.

[11] See ‘The Older American Worker – Age Discrimination in Employment’: Report to Congress under s715 of Civil Rights Act (1964).

[12] ‘Aid for the Aged. Message from President of the United States.’ Printed at 113 Cong.Rec. 1089-90 (Jan 23 1967).

[13] Title 29 Chap. 14 @ 623(1)(a) ‘It shall be unlawful an employer to fire or discharge or otherwise discriminate with respect to compensatory terms, conditions or privileges of employment because of such individual’s age’.

[14] 29 USC s621 (a) (2).

[15] See US Senate Report ‘Special Committee on Ageing’ (2000) 106.s.Rep 229; Feb 7 2000.

[16] Quoted in K Seagrave, Age Discrimination by Employers (2001)165.

[17] See 123 Cong.Rec. 34310 (1977).

[18] 472 US400 (1985).

[19] Usery v Tamianni Trail Tours Inc., 531F.2 (d) 224 (5th Cir.1976).

[20] EOC (Equal Opportunities Commission) v New Jersey 6201 Supp. (DW) 1985.

[21] Metz v Trans-Mix Inc. 828 F 2(d) 1202 (6th Circ 1987).

[22] Bay v Time Mirror Magazines Inc, [1991] USCA2 752; 936 F.2 (d) 112 (2nd Cir 1991).

[23] Texas Department of Community Afairs v Burdine [1981] USSC 42; 450 US 248.

[24] Civil Rights Act of 1991. Pub.L No 102-166, 105 (1981).

[25] [1993] USSC 94; 509 US 502 1993.

[26] Hazen Paper Company v Biggins [1993] USSC 41; 507 US 604 (1993).

[27] See Ellis v United Airlines, 73 F. 3(d) 999 (10th Cir 1996). The Court rejected the disparate impact theory in respect of the ADEA.

[28] Cal. Govt. Code s.12941 (Deering’s 1999).

[29] US Senate Special Report on Ageing. 100 SRM 229 (Feb 7 2000).

[30] US Equal Employment Opportunities Commission Report (2000).

[31] See footnote 14 above.

[32] Enacted as Schedule B to the Canada Act 1982 (UK) 11 which came into force on April 17, 1982.

[33] s15 (1).

[34] McKinney v University of Guelph [1990] CHRRD/13.

[35] Section 15 grants equality to every individual before the law without discrimination and in particular, without discrimination based on race, ... colour, religion, sex, age or mental or physical disability.

[36] R v Oakes (1986) 1 SCR 103.

[37] Etobicoke (Borough) v Ontario (Human Rights Commission) (1982) 1 SCR 202.

[38] Saskatchewan (Human Rights Division) v Saskatchewan (City) 1989 11 CHRR D/204.

[39] Greater Vancouver Regional District Employees’ Union v Greater Vancouver Regional District [2001] BCJ No 2026 [2001] BCCA 435.

[40] SA CCA WU v Sentrachem (1988) ILJ 410.

[41] Chamber of Mines v Council of Mining Union (1990) 10 ILJ 52 (LAC).

[42] Preamble to the Constitution of the Republic of South Africa: Act 108 of 1996.

[43] s9 of Bill of Rights (Equality Clause).

[44] s9 (3) 9(4) of the Constitution.

[45] s2 1 of the Constitution.

[46] No 66 of 1995.

[47] LRA s188.

[48] See footnote 44 above.

[49] Harksen v Lane NO, 1998(1) SA 300 (CC) 323.

[50] s187 (2) (b).

[51] s187 (2) (b0 of Labour Relations Act: Act 66 of 1995.

[52] In terms of s22 (1) of the Constitution, ‘Everyone has the right to fair labour practice’.

[53] In terms of the Employment Equity Act: Act 55 of 1998.

[54] Schmahmann v Concept Communications Natal (Pty) Ltd. [1997] 18 ILJ 1333 (LC).

[55] s187 2(b) ‘a dismissal based on age is fair if the employee has reached the normal or agreed age for persons employed in that capacity’.

[56] Gquibitole v Pace Community College (1999) 30 ILJ (1270) (LC).

[57] Mori Survey for Dept of Work and Pensions, December 2002, quoted in ‘Achieving Equality at Work’, The Institute of Employment Rights (2003)

[58] See EEOC v Florida Department of Highway. Safety and Motor Vehicles 660 F. Supp (ND FLA 1986).

[59] Etobicoke v Ontario (Human Rights Commission) [1982] 1 SCR 202.

[60] Qantas Airways Limited v Christie [1998] HCA 18 [19th March 1998].

[61] In terms of EU Directive 2000/78.

[62] See MJW Schmidt ‘The Need for Modernising German Labour Law Arising from the Ban on Age Discrimination’ (unpublished article).

[63] Hepple ‘Age Discrimination in Employment – Implementing the Framework Directive 2000/78’ IPPR Seminar (Dec 2000) 206.

[64] s187 (2) (a) of the LRA ‘a dismissal may be fair if the reason for the dismissal is based on the inherent requirements of the job’.

[65] See Note above.

[66] McKinney v University of Guelph CHRR D/1 13 [1990].


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