John Michael McCormick became an equity partner at Fasken
Martineau DuMoulin LLP (“Faskens”) in 1979. In the 1980s the equity
partners of Faskens voted to adopt a provision in their partnership agreement
whereby equity partners were required to retire and divest their ownership
shares in the partnership at the end of the year in which they turn 65. In
2009, when he was 64, Mr. McCormick brought a claim before the British Columbia Human Rights Tribunal (“Tribunal”) alleging that the provision
in the partnership agreement constituted age discrimination contrary to the
British Columbia Human Rights Code (“Code”).
Faskens applied to have the claim dismissed on the grounds
that the complaint was not within the jurisdiction of the Tribunal and that
there was no reasonable prospect that that it would succeed. Faskens argued
that McCormick, as an equity partner, was not in the type of workplace
relationship covered by the Code.
The Tribunal concluded that there was an employment relationship and
concluded that Faskens had discriminated against McCormick. Faskens' application
for judicial review was dismissed by the British Columbia Supreme Court.
However, the British Columbia Court of Appeal allowed Faskens’ appeal,
concluding that McCormick, as a partner, was not in an employment relationship with
Faskens pursuant to the provisions of the Code.
McCormick ‘s further appeal to the Supreme Court of Canada was
dismissed.
The Supreme Court, with reasons written by Justice Abella,
unanimously held that the Code was a quasi-constitutional legislation which
should be “generously” interpreted to permit it to achieve its broad public
purposes. Those purposes include the prevention of arbitrary disadvantage or
exclusion based on enumerated grounds so that individuals deemed to be
vulnerable by virtue of a group characteristic can be protected from
discrimination. The Code achieves these purposes by prohibiting discrimination
in a context such as employment.
Deciding who is in an employment relationship for the
purposes of the Code means examining the “two synergetic” aspects in the
relationship: control exercised by an employer over working conditions and
remuneration, and corresponding dependency on the part of the worker. The test
is who is responsible for determining working conditions and financial benefits
and to what extent does a worker have an influential say in those
determinations. The more the work life of individuals is controlled, the
greater their dependency and, consequently their economic, social and
psychological vulnerability in the workplace.
Control and dependency are a function of whether the worker
receives immediate direction from or is effected by the decision of others and
also whether he or she has the ability to influence decisions which critically
affect his or her working life. Ultimately, the key is the degree of control
and the extent to which the worker is subject and subordinate to someone else’s
decision-making over working conditions and remuneration.
Applying the control/dependency test to this case, Justice
Abella found that in addition to the right to participate in the management of
the partnership, McCormick benefited from other control mechanisms, including the
right to vote for and stand for election to the firm's board; the duty that the
other partners owed him to render accounts; the right not to be subject to
discipline or dismissal; the right on leaving the firm to his share of Faskens' capital
account; and the protection that he could only be expelled from the partnership
by a special resolution passed by a meeting of all equity partners and a
regional resolution in his region.
The court found that as an equity partner and based on his
ownership sharing of profits and losses and the right to participate in
management, McCormick was part of the group that controlled the partnership, not
a person vulnerable to its control and for over 30 years had benefited
financially from the retirement of other partners. McCormick was not ever in a
subordinate relationship with the other equity partners.
Interestingly, the court held that it is not to say that a
partner in a firm can never be an employee under the Code but in the absence of
any genuine control of McCormick in the significant decisions effecting the
workplace, in this case there was no employment relationship between him and Faskens under the provisions of the Code. Accordingly, the court found that
the Tribunal had no jurisdiction over McCormic’s relationship with Faskens.
Regards,
Blair
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