The Supreme Court of Canada released a highly-anticipated
decision for professional partnerships, employers and employees
today in McCormick v Fasken Martineau DuMoulin
LLP. We commented previously on the facts of
the case and the history of proceedings to the British Columbia
Court of Appeal here.
In short, McCormick, a partner at a large law firm, claimed that
the mandatory retirement provision in the partnership agreement was
discriminatory and contravened the Human Rights Code. The
case was eventually heard by the British Columbia Court of Appeal,
which concluded that McCormick could not be both a partner and an
employee of the partnership. The Supreme Court of Canada
upheld the result in the Court of Appeal, but disagreed
with the lower court's following conclusion:
There can be no doubt that in Canadian law, a partnership is not
a separate entity from its partners, and a partner cannot be an
employee of, or employed by, a partnership of which he is a
The Court held that the Court of Appeal focused too much on the
legal form of a partnership, rather than its substance.
Rather, in determining whether an employment relationship
exists, "control and dependency define the essence of an
employment relationship for purposes of human rights
legislation". In assessing control and dependency, the
[W]ho is responsible for determining working conditions and
financial benefits and to what extent does a worker have an
influential say in those determinations? The more the work life of
individuals is controlled, the greater their dependency and,
consequently, their economic, social and psychological
vulnerability in the workplace...Ultimately, the key is the degree
of control and the extent to which the worker is subject and
subordinate to someone else's decision-making over working
conditions and remuneration.
The Court found that, as an equity partner in the law firm, Mr.
McCormick had significant control over his working life,
an ownership interest in the firm;
sharing of the partnership's profits and losses; and
participation in management, which included his ability to vote
on and implement workplace policies, including the firm's
mandatory retirement policy.
In addition, the Court found that Mr. McCormick benefitted from
other control mechanisms in his relationship as an equity partner,
the right to vote for and stand for election to the
the duty of other partners to render accounts;
the right not to be subject to discipline or dismissal;
the right, on leaving the firm, to his share of the firm's
capital account; and
the protection of only being able to be expelled by a special
Ultimately, the Court saw Mr. McCormick "as someone, in
control of, rather than subject to, decisions about workplace
With the large and liberal interpretation that is given to human
rights legislation, and the definition of "employment" in
particular, parties to human rights complaints often find that
application of discrimination in employment provisions in human
rights legislation can be something of a moving target. We expect
that employers and employees alike will benefit from the
Court's guidance that the essence of the employment
relationship is defined by control by, and the resulting dependency
on, another entity regarding the terms and conditions of
Unfortunately, reasonable accommodation for employees in the workplace continues to be the source of significant litigation and even today we continue to see outrageous examples of employers behaving badly.
We are now beginning to see reported cases involving charges and subsequent fines laid against employers for failing to provide information, instruction and supervision to protect a worker from workplace violence.
On October 13, 2016, the Supreme Court of Canada denied leave to appeal an Ontario Court of Appeal decision which ordered an employer to pay a former employee 37 months of salary and benefits following termination.
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