Managing the Boomer Generation of Workers – Part I

The massive Baby Boomer generation started to turn 65 in 2012.  For employers, this poses both an opportunity and a challenge.  Employers facing shortages of skilled labour, may want to look for ways to keep employees in the work place longer.  On the other hand, the boomer generation is choosing to retire later, so employers with employees who no longer are meeting required performance expectations have to navigate around human rights laws prohibiting mandatory retirement, and claims of ageism. 

In a two-part blog, I’ll provide advice to employers on the opportunities and challenges of retaining and hiring older employees, and dealing with employees who are delaying retirement.   

Retention and Recruitment of Older Workers

Based on the size of the boomer generation, it stands to reason that many (if not most) employers will not be able to replace all of their retiring employees, and will have to look to innovative ways to meet their manpower needs.  One obvious tactic is to encourage older employees to stay longer, and to hire older employees. 

Employers who want to encourage employees of retirement age to stay working will have to be flexible, reconfiguring if necessary how the work is performed and when.  Phased-in retirement, modified hours or duties, or re-deploying older workers to training and mentoring roles duties can induce older employees to stay working and provide employers with the necessary skills or transition to allow an employer to train-up replacements.   Also, employers can take advantage of the number of newly retired or laid off older employees for temporary or part-time roles. 

When I advise my clients who want to enter into any of these arrangements or hire older employees, I strongly recommend they put a contract in place, before the modified role or new employment terms start.  Key elements of these contracts are set out below.

1. Confirm any changes in responsibilities, salary, benefits, title or reporting structure. Otherwise, you’ll be vulnerable to constructive dismissal allegations, claims for severance and other damages.
2. Clearly state the company’s expectations for production or performance so there is no misunderstanding about the company’s expectations, especially if you are implementing changes to an existing employee’s work schedule or responsibilities. Objective targets and expectations make it easier to measure employees’ performance, which is even more important when managing performance of older workers to avoid later claims of age-based discrimination.
3. Ensure the contract includes some provisions for a regular review of the employee’s performance, and whether any agreed modifications to an existing role are working. Regular communication on these matters increases the chances of a mutually successful relationship, and provides opportunities to identify and remediate problems. If termination (of the modified role or employment) later becomes necessary, this will reduce costly severance claims and disputes. 
4. Because common-law severance obligations and rights significantly increase if employees are 50 or older, it can be very expensive to terminate these employees if they are not working out.  Even short term employees can be entitled to many months of notice of termination or pay in lieu of notice.  (Many employers mistakenly think that if they rely on the termination provisions in applicable Employment Standards legislation, they will have met all of their severance obligations.) Thus, agreeing in advance to the notice or pay in lieu of notice an employee would receive if terminated without cause, is absolutely critical when hiring older workers. 
5. Put all agreements in writing, otherwise, disputes will inevitably arise. In my experience, if parties take the trouble to clearly document what was agreed to, they almost never have any misunderstandings or disputes over the terms. Also, written terms make it much more difficult for an employee to later claim the terms were different.
6. It is very that these contracts are signed before new employment or modified work arrangements commence.  In this way, the new terms become conditional  on the employer’s agreement to terms which benefit the existing employee, or employment for new employees.  Then, if an employer later needs to rely on a provision of the contract, it will be able to do so and avoid any claims from their employees that the new contract terms were unenforceable because there was no “consideration” for the employee to have entered into the contract.  

Older workers have a wealth of skills and experience to offer, and hiring older employees or agreeing to modifying existing duties, targets or schedules for existing employees can result in significant benefits to employers. By managing the issues discussed, employers can have the benefits of retaining or hiring experienced and flexible employees without some of the severance and other legal risks that might arise.

by Nicole M. Byres

Check back next week for part two on managing baby boomers' retirement demands.

For more information and advice contact a Miller Thomson lawyer at: [email protected].