Canada: The UK And Canadian Supreme Courts To Consider The Legal Status Of Equity Partners

Last Updated: April 8 2013
Article by Sam Rogers

Most Read Contributor in Canada, September 2018

Can equity partners at professional firms take advantage of statutory employment law protections? Both the UK and Canadian Supreme Courts have recently granted leave in cases which consider that question. In the UK, Clyde & Co LLP v Bates Van Winkelhof concerns a whistle blower claim, money laundering in Tanzania, and allegations of sexual discrimination. In Canada, Fasken Martineau DuMoulin LLP v. British Columbia (Human Rights Tribunal) is, in typical Canadian fashion, far less exciting. It concerns the application of a national full service law firm's mandatory retirement policy.


The majority of multi-lawyer law firms in the United Kingdom, Canada, and other common law jurisdictions are run as partnerships. For large firms with hundreds of partners and offices across the country or around the world an individual partner's involvement in the management of the firm may be limited to voting to elect a board of partners. Although these partners share in the profits of the firm they no longer have any effective management or control over the partnership of which they are a member.

Given that, some partners may see themselves as more akin to employees rather than true partners. This then raises the question, to what extent should law firm partners be able to rely on statutory protections designed to benefit employees?

Decisions Below

Clyde & Co LLP v Bates Van Winkelhof

The claimant was an English qualified solicitor and equity partner who spent most of her time living and practicing law in Tanzania. She reported that the managing partner of a local, affiliated, firm was involved with money laundering and bribing officials. She was suspended by her firm and fired following an investigation. She brought a claim against her firm pursuant to the "whistle blower provision," section 47B of the Employment Rights Act 1996. She also brought claims pursuant to  section 45 of the Equity Act 2010 for discrimination on the basis of her sex and because she was pregnant.

Her firm raised the preliminary objection that, with respect to the whistle blower claim, that she was not a "worker" as defined by subsection 230(3) of the Employment Rights Act. The Employment Tribunal agreed, holding that the claimant was not a "worker" as "the claimant was in business in her own right receiving a share of the profits in relation to the work carried out."

On appeal to the Employment Appeal Tribunal, the claimant was successful. The court found that the claimant had "precluded herself from offering her professional services to anyone but" her firm and was therefore in a "subordinate position" and a worker.

Finally, before the EWCA, the firm was successful. Although the reasoning of the court is (necessarily) convoluted it boils down to two key points. First, legally:

[S]ince the partnership is not a separate legal entity, the parties are in a relationship with each other and accordingly each partner has to be employed, inter alia, by himself. He would be both workman and employer which is a legal impossibility. (para 63)

It should be noted that, in the UK, Limited Liability Partnerships do in fact have legal status separate from their members by operation of section 1 of the Limited Liability Partnership Act 2000. However, section 4(4), of the same act, forced the Court to ask whether the claimant would have been considered a worker had the firm been a partnership with unlimited liability under the Partnership Act 1890. Partnerships under that act do not have separate legal status.

Second, sociologically:

The very concept of employment presupposes as a matter of sociological fact a hierarchical relationship whereby the worker is to some extent at least subordinate to the employer... Where the relationship is one of partners in a joint venture, that characteristic is absent. Each partner is agent for the other and is bound by the acts of the other and each partner is both severally and jointly liable for the liabilities of the partners. There is lacking the relationship of service and control which is inherent in both concepts of employee and limb (b) worker. The partnership concept is the antithesis of subordination. (para 64)

Fasken Martineau DuMoulin LLP v. British Columbia (Human Rights Tribunal)

The claimant was a senior equity partner in Fasken's Vancouver office. Fasken, like many national firms in Canada, has a mandatory retirement age of 65 for equity partners.

mant was forced into retirement and filed a complaint with the Human Rights Tribunal alleging that he was discriminated against on the basis of age contrary to section 13 of the British Columbia Human Rights Code. Fasken brought an application to dismiss the complaint on the basis that the Tribunal did not have jurisdiction as there was no employment relationship.

The Tribunal disagreed finding that, although at common law an employment relationship may not exist, for the purposes of administering the Code, the complainant was employed by Fasken. Fasken appealed and the British Columbia Supreme Court agreed with the Tribunal holding that the "broad and liberal approach to the concept of employment for human rights" allowed the Tribunal to take jurisdiction. Fasken appealed again and won at the British Columbia Court of Appeal. Writing for the court, Madam Justice Levine held:

In my opinion, the principles of interpretation of the Human Rights Code,... which mandate a broad, liberal approach consistent with its remedial purposes, do not change underlying legal relationships to the extent found by the Tribunal and the chambers judge. In particular, they do not extend to overriding the fundamental and well-established principle of law that a partnership is not, in law, a separate entity from, but is a collective of, its partners, and as such, cannot, in law, be an employer of a partner. (para 3)

Potential Significance

These cases will help inform and define the nature of the relationship between individual equity partners and their firms in Canada, the UK, and other common law jurisdictions.

Fasken could have significant implications for any full service law firm in Canada with a mandatory retirement age. A holding by the Supreme Court that the Tribunal has jurisdiction could open firms to a large number of similar claims.

Clyde and Co. LLP could have similarly significant implications. A finding that the claimant was in fact a worker, as defined by the Employment Rights Act, 1996, would give law firm partners a range of legal protections to which they have never before had access.

On a broader level, although both of these cases concern law firms, the rulings will equally apply to accounting firms as well as any other professional firm organized as a LLP. A finding that partners enjoy statutory employment law protections will have a significant impact on the operation of these firms.

Case Information

Clyde & Co LLP v Bates Van Winkelhof, [2012] EWCA 1207

UK Supreme Court Docket: UKSC 2012/0229

Date of Leave: February 12, 2013

Fasken Martineau DuMoulin LLP v. British Columbia (Human Rights Tribunal), 2012 BCCA 313

Supreme Court of Canada Docket: 34997

Date of Leave: March 7, 2013

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions