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 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 MoreBy Kimberly Bungay and Colton Smith Since June of 2019, corporations formed under the Canada Business Corporations Act have been required to prepare and maintain a register of individuals with significant control (an “ISC Register”).…
Read MoreBy Kim Walsh and Olivia Bungay Compliance with Russian sanctions goes beyond complying with Canada’s Russia Regulations. Canadian individuals and businesses may be unaware of several other sanctions regimes that apply to them. In conjunction…
Read MoreBy David Randell, Robert Grant, K.C., Sadira Jan, and James Gamblin On June 14, 2023, the Province of Nova Scotia released the first of three modules (the “Module”) which will comprise the Nova Scotia Offshore…
Read MoreBy: Joe Thorne, Giles Ayers, and Jayna Green Introduction Prior to June 1, 2023, decisions made by municipal town councils in Newfoundland and Labrador could be appealed to one of four Regional Appeal Boards pursuant…
Read MoreBy Kim Walsh and Olivia Bungay Canadian sanctions targeting Russia in relation to Russia’s ongoing invasion of Ukraine were significantly expanded over the past year. Critical to compliance with Canada’s sanctions targeting Russia, individuals and…
Read MoreBy Kim Walsh and Olivia Bungay Canadian sanctions targeting Russia in relation to Russia’s ongoing invasion of Ukraine were significantly expanded over the past year. The Special Economic Measures (Russia) Regulations impose sanctions on individuals…
Read MoreDavid Randell, Sadira Jan, Robert Grant, K.C., Greg Moores, G. John Samms, and James Gamblin The recent tabling of federal legislation is an important step for offshore wind development in the offshore areas of Nova…
Read More