This morning the Supreme Court of Canada released its much
awaited decision in McCormick v. Fasken Martineau DuMoulin, holding
that most legal (and other professional) partnerships are not
subject to Human Rights obligations to partners, because there is
no "employment relationship" between a firm and its
partners. In the Fasken's case, the issue was the partnership
provision which required an equity partner to retire at age 65, a
provision common in most professional partnerships. While partners
were subject to various policies and administrative rules, the
Supreme Court formulated the analysis as one of control and
...the test is who is responsible for determining working
conditions and financial benefits and to what extent does a worker
have an influential say in those determinations?
The Court very strongly expressed the view that in most
partnerships equity partners have a right to participate
meaningfully in the decision making process. The partner in
question was "part of the group that controlled the
partnership, not a person vulnerable to its control."
The Supreme Court noted that in some jurisdictions – most
notably the United Kingdom, Australia and New Zealand – there
are specific statutory provisions which make employment legislation
(including Human Rights) applicable to partnerships. The Court
noted also the duty of fairness and good faith specifically set out
in the B.C. Partnership Act but then added that it would
be difficult to see how that duty could preclude a partnership from
instituting a mandatory retirement policy "designed to benefit
all partners by ensuring the regenerative turnover of partnership
One final note: professional partnerships must
still take care that not too many energized senior partners
"jump ship" late in their careers.
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