Client Update: Professional Partnerships Breathe Easier
This morning the Supreme Court of Canada released its much awaited decision in McCormick v. Fasken Martineau DuMoulin, holding that most legal (and other professional) partnerships are not subject to Human Rights obligations to partners, because there is no “employment relationship” between a firm and its partners. In the Fasken’s case, the issue was the partnership provision which required an equity partner to retire at age 65, a provision common in most professional partnerships. While partners were subject to various policies and administrative rules, the Supreme Court formulated the analysis as one of control and dependency:
…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 Court very strongly expressed the view that in most partnerships equity partners have a right to participate meaningfully in the decision making process. The partner in question was “part of the group that controlled the partnership, not a person vulnerable to its control.”
The Supreme Court noted that in some jurisdictions – most notably the United Kingdom, Australia and New Zealand – there are specific statutory provisions which make employment legislation (including Human Rights) applicable to partnerships. The Court noted also the duty of fairness and good faith specifically set out in the B.C. Partnership Act but then added that it would be difficult to see how that duty could preclude a partnership from instituting a mandatory retirement policy “designed to benefit all partners by ensuring the regenerative turnover of partnership shares”.
One final note: professional partnerships must still take care that not too many energized senior partners “jump ship” late in their careers.
Archive
Included in Discovery: Atlantic Education & the Law – Issue 07 Stephen Penney and Tyler Callahan Universities continue to work creatively to meet market demands despite consistent declines in public funding. Consequently, untenured term appointments…
Read MoreIncluded in Discovery: Atlantic Education & the Law – Issue 07 Sacha Morisset Confidentiality regarding the terms of the settlement of a legal dispute is a key consideration for many parties. Most accept that the…
Read MoreChad Sullivan and Kathleen Nash In June 2020, the Federal Government released the new Work Place Harassment and Violence Prevention Regulations (“Regulations”) along with Bill C-65, An Act to amend the Canada Labour Code (“Code”).…
Read MoreRob Aske As we wrote about earlier, Canada’s federal government has proposed a replacement to our national privacy law for commercial transactions known as the Personal Information Protection and Electronic Documents Act (“PIPEDA”). The new…
Read MoreKatharine Mack After a relatively carefree Atlantic summer, the bubble has officially burst: as COVID-19 cases begin to rise, New Brunswick, Prince Edward Island and Newfoundland and Labrador have all announced that they will be…
Read MoreWe are pleased to present the seventh issue of Discovery, our very own legal publication targeted to educational institutions in Atlantic Canada. While ‘back to school’ may look a little different this year, Stewart McKelvey is…
Read More2021: The Year of the Overshare Richard Niedermayer, TEP, Sarah Almon and Madeleine Coats Governments around the world are taking steps to increase transparency at the expense of privacy. In Canada, federal government strategies to…
Read MoreKoren Thomson and Sarah Byrne On November 17, 2020, the Digital Charter Implementation Act, 2020 (“Act”) was introduced as Bill C-11. This is the first major update to the federal private sector privacy regime in…
Read MoreJennifer Thompson The Federal Government has released draft Regulations under the Pay Equity Act (“the Act”), almost 11 months after the Act received Royal Assent. The Act, which is not yet in force, makes significant…
Read MoreKathleen Leighton Employers often wonder what steps they need to take to hire international talent, including what support they must provide to enable a foreign worker to obtain proper work authorization in Canada. This is…
Read More