Skip to content

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.

SHARE

Archive

Search Archive


 
 

Supreme Court of Canada may re-consider municipal liability for policy vs. operational decisions

September 23, 2020

Giles Ayers and Joe Thorne Introduction Balancing a municipal budget has always been a challenging task in Newfoundland and Labrador, and this is particularly true in a year of extreme weather events and a global…

Read More

Beyond the border: Immigration update – September 2020

September 8, 2020

We are pleased to present the third installment of Beyond the border, a publication aimed at providing the latest information to clients about new programs and other immigration-related information that may be pertinent to employers of…

Read More

Newfoundland and Labrador mandates masks in workplaces

August 24, 2020

Harold M. Smith, QC and G. John Samms Effective Monday, August 24, 2020, an order directing the mandatory wearing of masks, pursuant to the Public Health and Protection Act and the Special Measures Orders made…

Read More

New Brunswick’s new Enduring Powers of Attorney Act

August 10, 2020

Gerald McMackin, QC and Christopher Marr, TEP New Brunswick joined the rest of Canada in enacting legislation that deals solely with powers of attorney when the Enduring Powers of Attorney Act (“Act”) came into force…

Read More

Prince Edward Island Labour and Employment legislative changes

July 31, 2020

Murray Murphy, QC, CPHR and Kate Jurgens Three new bills have been introduced in the most recent sitting of the Prince Edward Island legislature. In the employment setting Bill 38 aims to address the prevalence…

Read More

Game over for waiver of tort

July 27, 2020

Jennifer Taylor   The Supreme Court of Canada has finally put an end to the “waiver of tort” debate.   After years of uncertainty, a majority of the Court confirmed in Atlantic Lottery Corp Inc…

Read More

COVID-19 – potential liability for municipalities

July 21, 2020

Stephen Penney and Justin Hewitt As municipalities begin opening up recreational facilities in Alert Level 2 of the COVID-19 public health emergency implemented by the Provincial Government, Municipalities Newfoundland and Labrador has been receiving inquiries…

Read More

Applicability of business tax where operations limited

July 21, 2020

There is no obligation upon a municipality to reduce a business tax due to limited operations secondary to the COVID-19 pandemic. A municipality does, however, have the discretion to offer business tax relief. If a…

Read More

You’re more essential than you think: it is crunch time for Newfoundland and Labrador employers to avail of Essential Worker Support Program

July 9, 2020

Ruth Trask and John Samms Newfoundland and Labrador employers who continued operations this spring during Alert Levels 4 and 5 of the COVID-19 pandemic should take note of a new program offered by the provincial…

Read More

New Brunswick regulator seeks input on changes to defined benefit pension plan funding

July 8, 2020

Christopher Marr, TEP & Lauren Henderson As defined benefit pension plans (“DB Plans”) throughout Canada continue to face funding challenges due to mounting solvency deficits, the New Brunswick Financial and Consumer Services Commission (“FCNB”) is…

Read More

Search Archive


Scroll To Top