Equity partner who is not exercising genuine control over the decisions affecting the workplace, not considered to be in an employment relationship with the partnership firm, under the Human Right’s Code

Supreme Court of Canada: Where a question arose as to whether an equity partner in a law firm is an employee within the meaning of the Human Rights Code, R.S.B.C. 1996, c. 210 (in short “the Code”), the Court held that the test of determining the control/dependency of the worker with the employer so as to examine the “employment relationship” under the Code, is to find out as to who is responsible for determining the working conditions, financial benefits and the extent to which a worker has a say in it. The brief facts of the case are that the petitioner became an equity partner at his law firm, having ownership interest therein. The equity partners voted to include a provision in their Partnership Agreement that required equity partners to retire as equity partners and divest their ownership shares at the end of the year in which they turned 65. A partner could make arrangements to continue working as an employee or as regular partner without an equity stake. When the petitioner turned 64, he filed a complaint to the Human Rights Tribunal arguing that this provision constituted age discrimination in employment, contrary to Section 13(1); of the Code.

Holding, that the Tribunal had no jurisdiction over the petitioner’s relationship with the partnership, the Court said that “employment relationship” under the code means examining how two synergic aspects function in an employment relationship i.e. the control exercised by an employer over working conditions, remuneration and dependency of the worker. Applying the control/dependency test in addition to the right to participate in the management of the partnership, as an equity member, the petitioner benefited from other control mechanisms, including right to vote for and to stand for election in the firm’s board. This is not to say that a partner can never be an employee under the Code, but in absence of any genuine control of the petitioner in the decisions affecting the workplace, there is no employment relationship in this case. McCormick v. Faken Martineau DuMoulin; LLP, 2014 SCC 39; decided on 22 May, 2014

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