The Supreme Court of Canada has upheld a law firm
partnership's mandatory retirement policy in McCormick v.
Fasken Martineau DuMoulin LLP, 2014 SCC 39. In doing
so the Court found that the partner was not an "employee"
entitled to age discrimination protection under the British
Columbia Human Rights Code (the
John (Mitch) McCormick was an equity partner at the
Vancouver office of the Fasken Martineau DuMoulin LLP law firm. As
a partner, McCormick was a party to the partnership agreement that
governs the relationship among all Faskens' partners. The
partnership agreement requires each equity partner to retire at the
end of the year in which the partner reaches the age of 65.
McCormick turned 65 in 2010 and was required, as per the terms of
the partnership agreement, to retire by January 31, 2011.
Before his mandatory retirement date, McCormick brought a
complaint against Faskens under the Code, alleging that he
had suffered discrimination on the basis of age. McCormick's
complaint was based on the allegation that Faskens persistently
tried to compel him to retire from the firm in compliance with the
agreement, including demanding that he relinquish his equity
partner status, denying him increases in compensation, refusing
bonuses, arbitrarily increasing performance goals and generally
treating him in a manner inconsistent with both his performance and
how other equity partners were treated at the firm. The case worked
its way up from the BC Human Rights Tribunal all the way to the
Supreme Court of Canada Decision
The Supreme Court held that McCormick was not an employee under
the Code and that therefore the Human Rights Tribunal has
no jurisdiction over his relationship with the partnership.
When deciding who is in an employment relationship for the
purposes of the Code, the Court focused its analysis on two
factors: (i) control exercised by an employer over working
conditions and remuneration, and (ii) a corresponding dependency on
the part of a worker. Based on these two factors, the Court
outlines these key questions for determining whether an employment
relationship exists: who is responsible for determining working
conditions, who determines financial benefits, and to what extent
does the worker have an influential say in these decisions?
Looking to the factors of control and dependency, the Court
found that McCormick was a part of the group that controlled the
partnership, not someone vulnerable to its control. While McCormick
was subject to the partnership's administrative regime, its
rules did not transform the substance of the relationship into one
of subordination or dependency. The Court looked specifically to
the ability of individual equity partners to participate
meaningfully and equitably in the decision making process which
determines both their workplace conditions and remuneration
including the right to vote, the right to stand for election to the
firm's board, the duty owed to him by other partners to render
accounts, the right not to be subject to discipline or dismissal,
the right to his share of the firm's capital accounts and the
high threshold for expulsion from the partnership.
The Court did not close the door completely on the applicability
of the Code to partnerships, holding that its decision
"is not to say that a partner in a firm can never be an
employee under the Code, but such a finding would only be
justified in a situation quite different from this case, one where
the powers, rights and protections normally associated with a
partnership were greatly diminished."
The foregoing provides only an overview and does not
constitute legal advice. Readers are cautioned against making any
decisions based on this material alone. Rather, specific legal
advice should be obtained.
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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