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
By Nancy Rubin, K.C. and Lauren Agnew The long-awaited Green Choice Program Regulations (N.S. Reg. 155/2023) were released by the provincial government on September 8, 2023, offering some clarity into the practical implementation of Nova…
Read MoreBy Koren Thomson, John Samms, and Matthew Raske The Newfoundland and Labrador Court of Appeal has held that the Information and Privacy Commissioner for this province (the “Commissioner”) does not have the authority to order…
Read MoreBy Perlene Morrison, K.C. Municipalities are required to pass code of conduct bylaws in accordance with section 107 of the Municipal Government Act (the “MGA”). Subsection 107(1) of the MGA specifically states that a municipality’s…
Read MoreBy Sheila Mecking and Kathleen Starke On August 23, 2023, the Ontario Superior Court (“ONSC”) upheld a complaints decision which ordered a psychologist to complete a continuing education or remedial program regarding professionalism in public…
Read MoreBy Dante Manna As we advised in a previous podcast, all federal employers with at least ten employees[1] have been subject to the Pay Equity Act [2] (“PEA”) and Pay Equity Regulations [3] (“Regulations”) since…
Read MoreBy Nancy Rubin, K.C. Environment and Climate Change Canada (ECCC) recently published a draft of the Clean Electricity Regulations (CER). The proposed Regulations work toward achieving a net-zero electricity-generating sector, helping Canada become a net-zero…
Read MoreBy Stephen Penney & Matthew Raske In the recent decision Index Investment Inc. v. Paradise (Town), 2023 NLSC 112, the Supreme Court of Newfoundland and Labrador validated the Town of Paradise’s decision to rezone lands…
Read MoreBy Sara Espinal Henao Immigration, Refugees and Citizenship Canada (“IRCC”) has announced a promising new temporary measure that allows foreign workers to study for a longer duration without a study permit, opening the door for…
Read MoreBy Brendan Sheridan The Government of Canada recently announced a number of aggressive immigration measures to help attract top talent to Canada in high-growth industries in an effort to fuel innovation and drive emerging technologies.…
Read MoreBy Daniela Bassan, K.C. All stakeholders in the legal profession, including litigators, have a shared interest in promoting environmental, social, and governance (ESG) pathways towards building a greener society. It is crucial for litigators to…
Read More