In its unanimous decision in McKormick v. Fasken
Martineau Dumoulin LLP1, released in May 2014, the
Supreme Court of Canada decided that an equity partner in a B.C.
law firm was not an "employee" within the meaning of the
British Columbia Human Rights Code. The case is significant to
professionals operating in "partnership" across the
McCormick had filed a complaint alleging that his firm's
mandatory retirement policy contravened Human Rights legislation.
Similar to the legislation in other provinces, the B.C. Code
prohibits discrimination in "employment" on a number of
prohibited grounds, including "age". The issue was
whether McCormick was an "employee" and therefore
afforded the protections of the Code.
The British Columbia Court of Appeal had found that
McCormick's "status" as a "partner" of his
firm, alone, was enough to substantiate a finding that he was not
an "employee". The Supreme Court did not agree, finding
that the legal form of the parties' relationship is not
determinative, and preferring to apply a "control" and
"dependency" test. According to the Court, the applicable
question is "who is responsible for determining working
conditions and financial benefits and to what extent does the
worker have an influential say in those determinations?"
The degree of control and resulting dependency will determine
whether the individual is an employee or not.
The Court found that McCormick was operating in a common
enterprise with his partners and that "far from being
subject to the control of Fasken, McCormick was among the partners
who controlled it". In support of this finding, the Court
partnership and related voting rights
McCormick's compensation from the
The setting of McCormick's
compensation by a committee of his partners
McCormick's capital investment in
the firm; and
The fact that expulsion form the
partnership required extraordinary resolution
The Court was deliberate in pointing out that partners subject
to a more diminished set of rights could very well be found to be
employees under this test. This is particularly significant to law
firms with "tiers" of partnership, typically identified
by equity and non-equity (or "income") partners, where it
is quite possible that the latter could be found to be employees
for the purpose of applicable provincial Human Rights
The future application of the McCormick case may also affect
much more than simply lawyers' inclusion or exclusion under
applicable Human Rights legislation. The decision and its future
application will be important to professionals other than lawyers
(accountants, architects, etc...) for the same reasons that it is
relevant to lawyers and their firms. It will also be interesting to
watch and see whether (and how) the McCormick decision may affect
the future determination of employment status in contexts other
than Human Rights legislation.
1. McKormick v. Fasken Martineau DuMoulin LLP, 2014 SCC
Originally published June 2014
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.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
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.
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).