When is an owner also an "employee"? The Supreme
Court of Canada recently rendered a decision on the question of
whether a partner at a law firm could be an employee under human
rights legislation. The answer, perhaps not a surprise, is
McCormick v Faskin Martineau
v Fasken Martineau, the Supreme Court dealt with the complaint
of a former partner at a major law firm whose contract stipulated
forced retirement at age 65. McCormick alleged that the
clause discriminated against him on the basis of age. The
question before the Court was whether McCormick was an employee of
the law firm, which would bring the matter within the jurisdiction
of the British Columbia Human Rights Tribunal.
Generally in partnerships, partners have the ability to
participate meaningfully in the decision-making process concerning
their workplace conditions and remuneration. In addition,
partnership agreements tend to be very difficult to break, and a
high threshold (usually a supermajority of partners) is required to
expel a partner.
McCormick was a apparently a high-ranking member of the
partnership, who at times exercised significant managerial
authority. Moreover, he was able to work on his own account,
as ultimately his remuneration was determined by evaluating his
contribution to the firm. Given the high degree of
responsibility and autonomy, the Court found McCormick's
relationship with the firm was not one of dependency as would be
the case in an employment relationship.
In essence, the Court found that since the partners who form the
partnership control the working conditions and remuneration, they
are better described as the employer rather than employees.
The Court emphasized that when interpreting human rights
legislation, courts must take a "large and liberal" lens
to the exercise in keeping with within the aims of the statute,
namely protecting vulnerable members of society. As a
consequence, in the human rights context, courts and tribunals must
determine whether a particular workplace relationship represents
the kind of vulnerability that human rights legislation intended to
bring under its protective scope.
The Court found that two aspects of an employment relationship
were relevant for the test:
The control exercised by an employer over working conditions and
Corresponding dependency on the part of the worker
Using this test, the Court held that McCormick was not an
employee and was therefore not subject to the jurisdiction of the
Tribunal. However, the Court did not foreclose the
possibility that, on different facts, a business owner could be an
employee with access to human rights protection in employment.
What employers need to know
The test used by the Supreme Court is not revolutionary and is
in many ways a reformulation of prior case law. It is not
clear whether the Ontario Human Rights Tribunal will use this
formulation of the test, although it would be surprising if it did
not follow the Supreme Court's lead. This case
re-emphasizes the importance of a clear understanding of all
employment and work relationships, and the need for employers to
understand their corresponding duties.
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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