Human Rights Legislation does Not Apply to Partners

In a decision released today, the Supreme Court of Canada has held that British Columbia’s Human Rights Code, RSBC 1996, c. 210 does not apply to equity partners in law firms.

In its decision in McCormick v. Fasken Martineau DuMoulin LLP , 2014 SCC 39 (CanLII), the Supreme Court of Canada upheld a decision from the Court of Appeal for British Columbia, which said that the applicant in the case, an equity partner in a law firm, was not an employee for the purposes of protection under that law.

The decision is expected to have far-reaching impacts, because in the case heard by the Supreme Court the partnership agreement required partners to retire at age 65. The Supreme Court of Canada held that BC’s human rights’ legislation did not apply to the applicant's circumstances and could not be used to invalidate the requirement.

The two critical decisions of the court, were those made at paragraphs 33 and 46 of the decision, in which Justice Abella, writing for the Court said the following:

[33] In other words, the control over workplace conditions and remuneration is with the partners who form the partnership. In most cases, therefore, partners are not employees of the partnership, they are, collectively, the employer.

[46] This 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.

While there is more to be considered, this decision will unquestionably be reviewed closely by all lawyers, whether they be employment lawyers or not.

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As always, everyone’s situation is different. The above is not intended to be legal advice for any particular situation. It is always prudent to seek professional legal advice before making any decisions with respect to your own case.

Sean Bawden, publisher of Labour Pains, can be reached by email at sbawden@kellysantini.com or by phone at 613.238.6321.

Sean P. Bawden is an Ottawa, Ontario employment lawyer and wrongful dismissal lawyer practicing with Kelly Santini LLP. He is also a part-time professor at Algonquin College teaching Trial Advocacy for Paralegals and Small Claims Court Practice.