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Murray Etherington was let go from his old job to make way for a younger worker, but negotiated a larger severance.

J.P. MOCZULSKI FOR THE GLOBE AND MAIL

Self-employed warehouse safety inspector Murray Etherington, 67, jokes that he is on the "retire-at-85 plan," after being, he says, moved out of his old job in engineering four years ago to make way for a younger, less expensive worker.

Initially given just two weeks severance, he hired a lawyer and says he got his former employer to agree to a larger settlement that he cannot discuss.

"There's a lot of this going on, and there's probably going to be more, because, you know, the Baby Boomers, they just don't take that kind of stuff," Mr. Etherington said.

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With mandatory retirement for most workers gone, coupled with a demographic bulge and low returns on fixed-income investments, more older workers are putting off retirement and staying in the work force than ever before. And employment lawyers say they are seeing an increasing number of age-discrimination cases as a result.

At the same time, Canadian courts are also now more likely to award larger severance amounts to employees, particularly older ones who have less opportunity for new employment. For example, an Ontario court last year awarded a 70-year-old machine operator an additional 22-month severance, or $69,000, after 20 years of work.

And in 2012, a 72-year-old civil servant in Alberta was given her job back and awarded several years of back pay after winning an age-discrimination case over a move to not renew her contract when she was 67.

The issue is a legal minefield for employers, says Stuart Rudner, a Toronto employment lawyer with Rudner MacDonald LLP. For example, before mandatory retirement at 65 was eliminated, employers used to be able to allow problem workers to simply retire. Now, they may be tempted to force the issue.

"It used to be that if you had an older worker that might be slowing down … you would usually let them stay and retire with dignity," said Mr. Rudner, whose firm acts for both employers and employees in wrongful dismissal cases. "Now the problem is, what do you do?"

Mr. Rudner warns that employers who approach older workers and start complaining about their performance, or suggesting that they might want to retire, could be asking for trouble.

"As soon as you say anything …'You seem to be slowing down,' even if it relates to age indirectly, you are opening yourself to a human rights claim," he said. "So you have got to treat this so cautiously."

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Craig Rix, a partner at management-side employment firm Hicks Morley Hamilton Stewart Storie LLP, said employers need to start consistently applying "performance management" to workers of all ages from the day they are hired, and not just those near the end of their careers.

But Mr. Rix also says employers should look at older workers – often more reliable, with vast stores of experience, and no child-care issues – as an asset, as certain sectors are set to suffer from labour shortages: "I think there's a real silver lining there."

Susan Eng, the vice-president of advocacy for CARP, the Canadian Association of Retired Persons, said most age-discrimination cases against older workers go unreported and never make it to court or a human-rights tribunal, moves that can require expensive legal assistance and take years.

"Eliminating mandatory retirement provisions only removed legislated age discrimination," she said in an e-mail. "It did not remove discriminatory attitudes and practices in the workplace."

She said employers need to value older workers, respect their rights, and promote "inter-generational sensitivity" in the workplace: "Unfortunately, despite some talk, I see little evidence that this is happening."

Mr. Etherington, who is the chairman of CARP's Mississauga chapter, said despite the initial sting of losing his job, the move has been good for him.

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He says he is happier now that he has his own business, although it does not pay anywhere near as well, and that he has a much more flexible lifestyle that allows him to do volunteer work.

Mr. Etherington, who is helping to organize a CARP job fair in Mississauga for older workers next month (workreimagined.ca), says his advice for those in his shoes is to talk to a lawyer but also to keep an open mind about changing careers: "I wish I had done it 20 years ago."

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