Partners not normally employees of partnership

Supreme court | Employment | |


Partners not normally employees of partnership

Respondent was lawyer and equity partner in appellant firm and party to partnership agreement governing relationship of all law firm’s partners including retirement. Agreement required respondent to retire year he turned 65. Respondent filed complaint with respondent Human Rights Tribunal alleging discrimination in employment on ground of age, contrary to s. 13 of Human Rights Code (B.C.). Law firm’s application to dismiss complaint denied. Tribunal found it had jurisdiction over complaint on basis that respondent employed by firm. Law firm’s application for judicial review dismissed. Court of Appeal allowed law firm’s appeal, finding that respondent, as partner, not in employment relationship. Respondent’s appeal dismissed. As quasi-constitutional legislation, Code attracts generous interpretation to permit achievement of broad public purposes, including prevention of arbitrary disadvantage or exclusion based on enumerated grounds. Code achieves purposes by prohibiting discrimination in specific contexts such as “employment”, defined as including relationships of “master and servant”, “master and apprentice” and “principal and agent” but not restricted to them. Expansive approach should be given to “employment” under Code. Test for determining whether someone is in employment relationship under Code is, in essence, control/dependency test. Key is extent to which worker is subject and subordinate to someone else’s decision-making over working conditions and remuneration. Partnership is, by its nature, entrepreneurial relationship among individuals agreeing to do business together. Partners generally have right to participate meaningfully in decision-making process that determines workplace conditions and remuneration. Partnership agreements also typically create high threshold for expulsion. Where partners do leave partnership, they are entitled to be paid their share of partnership’s capital account. Partners not normally employees of partnership. Respondent was in control of, rather than subject to, decisions about workplace conditions. As equity partner, he was part of group that controlled partnership. Under partnership agreement, most major decisions, including those relating to firm’s mandatory retirement policy, were subject to vote of partnership. Respondent not dependent on firm in meaningful sense but rather was in common enterprise with partners for profit, working for his own benefit. In absence of any genuine control over J.M. in significant decisions affecting workplace, there was no employment relationship with partnership.
McCormick v. Fasken Martineau Dumoulin LLP (May. 22, 2014, S.C.C., McLachlin C.J.C., LeBel J., Abella J., Rothstein J., Cromwell J., Moldaver J., and Karakatsanis J., File No. 34997) Decision at 217 A.C.W.S. (3d) 666 was affirmed.  240 A.C.W.S. (3d) 430.

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