The Supreme Court of Canada has provided some important guidance
regarding who qualifies as an "employee" under the
British Columbia Human Rights Code in the case of
McCormick v. Fasken Martineau DuMoulin LLP (2014 SCC
Mr. McCormick was an equity partner at Fasken. The Fasken
Partnership Agreement required Mr. McCormick to divest his
ownership in the partnership and retire at the end of the year in
which he turned 65. Mr. McCormick filed a complaint with the
British Columbia Human Rights Tribunal alleging that the
requirement to divest and retire discriminated against him as an
"employee" on the basis of his age. While the Tribunal
found that Mr. McCormick was an "employee" for the
purposes of human rights legislation, its decision was eventually
overturned by the British Columbia Court of Appeal. In upholding
the Court of Appeal's decision, the Supreme Court of Canada
found that the factors determinative of an employment relationship
are the extent to which an individual is controlled by, and
dependent on, the alleged employer. The Supreme Court stated:
Control and dependency, in other words, are a function not only
of whether the worker receives immediate direction from, or is
affected by the decisions of others, but also whether he or she has
the ability to influence decisions that critically affect his or
her working life. The answers to these questions represent the
compass for determining the true nature of the relationship...
...What is more defining than any particular facts or factors is
the extent to which they illuminate the essential character of the
relationship and the underlining control and dependency.
Ultimately, the key is the degree of control, that is, the extent
to which the worker is subject and subordinate to someone
else's decision-making over working conditions and
Applying this test to partnerships generally, and to Mr.
McCormick's partnership in particular, the Court found that
based on partners' ownership, sharing of profits and losses,
and the right to participate in management, partners were
individuals who were in control of, rather than subject to,
decisions about workplace conditions. The Court found that Mr.
McCormick, as an equity partner, was part of "the group that
controlled the partnership, not a person vulnerable to its
control." While the Court recognized that Mr. McCormick had
been subject to certain administrative rules about how he performed
his work for the partnership, those administrative rules did not
transform the relationship into one of dependency. Indeed, those
administrative rules were ultimately subject to and controlled by
the partnership of which Mr. McCormick was a full and equal member.
Further, as an equity partner when the policy of retirement was
adopted, Mr. McCormick was entitled to vote on the policy that he
eventually challenged. The Court found that he was working not for
the benefit of someone else, which might suggest a dependency
relationship, but rather working as an individual in a common
enterprise with his other partners for profit and consequently for
his own benefit.
While this case will not impact the majority of businesses in
respect of their relationships with their employees, it does assist
by clarifying that the primary factors to be reviewed in
determining whether an individual is an employee are those of
control and dependency and that no particular list of activities or
formula should be applied to determine that relationship.
Accordingly, it is possible that this decision will not only impact
the view of whether a partner can be deemed to be an
"employee" in certain circumstances but also the extent
to which independent contractors, shareholders, agents, or others
that work for or with others but are not called
"employees" may be determined to be "employees"
for some purposes.
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.
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