On May 22, the Supreme Court of Canada upheld the British
Columbia Court of Appeal's decision that an equity partner in a
law firm was not an employee for the purposes of the B.C. Human
Rights Code (Code).
The case, McCormick v. Fasken Martineau DuMoulin LLP,
dealt with a complaint to the B.C. Human Rights Tribunal by John
McCormick, a then 64-year-old equity partner at the law firm of
Fasken Martineau DuMoulin LLP. McCormick argued that the mandatory
retirement provision of his partnership agreement violated the
prohibition against age discrimination in employment in the Code.
The provision required all equity partners to retire and divest
their ownership shares at the end of the year in which they turned
65. In an interesting twist, McCormick actually had a chance to
vote on this policy when the firm voted to adopt it in the
In order for the Code to apply to a retirement policy in a
partnership, the partners would have to be deemed employees, such
that the policy could constitute discrimination in
employment. Thus, the question for the Supreme Court was
whether McCormick, as an equity partner, could be considered an
employee under the Code.
The Court confirmed that the test used to assess whether an
individual is an employee is the "control and dependency
test," which looks to the control exercised by the alleged
employer over remuneration and working conditions as well as the
dependency or vulnerability of the alleged employee. The more
dependent an individual is, and the more control he or she is
subject to, the more likely it is that he or she is an
Partners are normally in control of remuneration and working
conditions, even though there may be administrative processes or
committees in place to address them. As a result, the Court found
that most partners in a partnership, including McCormick, will not
be employees for the purposes of the Code.
When Is a Partner Not a Partner?
In order for a partner to be an employee for the purposes
of the Code, the "powers, rights and protections normally
associated with a partnership" would have to be "greatly
diminished." Essentially, the partnership would have to lack
those basic hallmarks of control and power that exist in most
the protection afforded by the strict measures required to
expel a partner from the partnership and the right not to be
subject to discipline or dismissal;
the right, on leaving the firm, to the partner's share of
the firm's capital account;
the duty that partners owe each other to render accounts;
the fact that the partnership is run for the economic benefit
of the partners.
Notwithstanding the foregoing, the Court noted that partners may
have recourse for a claim of discrimination under s. 22 of the
(British Columbia) Partnership Act, which provides
that partners owe each other a duty of the utmost fairness and good
faith. However, the Court held that partners are not likely, absent
special circumstances, to be in breach of this duty where the
policy, as it was in this case, is "designed to benefit all
partners by ensuring the regenerative turnover of partnership
This case is equally applicable to partnerships outside of law
firms, including accounting, engineering and other
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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