May 30, 2014
Court of Canada unanimously ruled against a Vancouver lawyer who refused to retire at the age of 65 as required by his firm’s mandatory retirement policy.
The decision arose from a complaint by John Michael McCormick, an equity partner at a law firm, to the British Columbia Human Rights Tribunal which challenged the policy on the basis of age discrimination. The Tribunal found they had jurisdiction to decide the complaint, holding that McCormick was in an employment relationship with his firm and was therefore entitled to protection under the British Columbia’s Human Rights Code. The Tribunal’s ruling was reversed by the British Columbia Court of Appeal, which concluded that McCormick, as an equity partner of the firm, was not in an employment relationship pursuant to the Code.
The Supreme Court of Canada agreed with the reasoning of the Court of Appeal. In finding that McCormick was not, in fact, in an employment relationship with the firm, the Court emphasized McCormick’s degree of independence and control over his working conditions and remuneration. It concluded that he was not in a dependent relationship with the firm because as a partner he was in control of, rather than subject to, decisions governing his workplace. The Court also made particular note of McCormick’s participation in the partnership vote which resulted in the adoption of the mandatory retirement provision into the firm’s Partnership Agreement in 1980.
Despite these findings, the Court did not entirely rule out the possibility of a partner being an “employee” of the partnership of which he or she is a member. However, such a finding would only be justified in a narrow circumstances where the powers, rights and protections normally associated with a partnership were greatly diminished, and where the partner can establish his or her relationship with the firm is more akin to that of a traditional employment relationship based on the degree of independence and control over working conditions and remuneration.
It remains to be seen how the Supreme Court of Canada’s ruling will be applied to partnership agreements throughout the rest of Canada. For example, the Ontario Human Rights Code is broader than the British Columbia counterpart in that it applies to any contract, and not just employment.
If you have any questions about mandatory retirement, or any other questions relating to workplace law, please do not hesitate to contact a Mathews Dinsdale lawyer.
For more information on new developments in Workplace Law, please refer to our website at:
Click here for downloadable version