The Supreme Court of Canada ruled Friday that Saskatoon-based Potash Corp. (TSX:POT), did not violate the rights of Melrose Scott when he was cashiered at age 65 from the Saskatchewan company's mine in Sussex, N.B.

When he was forced to retire in 2004, Scott filed a complaint of age discrimination with the New Brunswick Human Rights Commission.

The complaint was upheld by the commission, but two lower courts overturned the ruling. The Supreme Court agreed with those courts, dismissing the appeal because Scott had a pension plan.

The decision came down to a fine-tuning of the legal definition of a "bona fide" pension plan.

New Brunswick's Human Rights Act prohibits companies from imposing mandatory retirement, unless they offer employees pension plans containing mandatory retirement provisions.

Several other provinces, including Alberta, Newfoundland and Labrador and Prince Edward Island, allow similar exemptions when pension plans are designed around retirement at age 65.

"This makes no sense," says CARP's vice president of advocacy, Susan Eng.

"Either we prohibit age discrimination or we don't."

Eng said her group was encouraged by a dissenting opinion in the ruling that age discrimination cannot be permitted simply because there is a pension plan.

"But to be sure, the provinces and the federal government should amend their legislation to eliminate the exemption for pension plans," she said.

In New Brunswick's case, its Human Rights Act states that an employer can force an employee to retire if they have a "bona fide retirement or pension plan that have the effect of a minimum service requirement."

The New Brunswick Human Rights Commission asked the courts to define the criteria for determining whether a pension plan is bona fide under the Act.

"In my view, for a pension plan to be found to be 'bona fide' . . . it must be a legitimate plan, adopted in good faith and not for the purpose of defeating protected rights," wrote Justice Rosalie Abella in dismissing the appeal.

"Unless there is evidence that the plan as a whole is not legitimate, therefore, it will be immune from the conclusion that a particular provision compelling retirement at a certain age constitutes age discrimination."

Nearly two decades ago, the Supreme Court ruled that mandatory retirement was a justifiable breach of the Charter of Rights.

Since then, however, a number of governments across the country have declared the action discriminatory.

A growing labour shortage has also forced employers to rethink the way they view their aging workforce.