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Law Firm Partners Not Employees under British Columbia Human Rights Code: BC Court of Appeal

Posted On: January, 21 2015

In a recent decision, Fasken Martineau DuMoulin LLP v. British Columbia (Human Rights Tribunal), the British Columbia Court of Appeal has overturned rulings from the BC Human Rights Tribunal and the BC Supreme Court which held that partners in business partnerships are entitled to the same protections as employees for the purposes of the BC Human Rights Code.

These rulings have now been overturned; according to the BC Court of Appeal, partners are not employees for the purposes of the Code, and are therefore not entitled to the Code’s protection against discrimination.

The case involved an age discrimination complaint brought by BC lawyer John McCormick.  Mr. McCormick was a partner for over 30 years at Fasken Martineau DuMoulin LLP.  Under the law firm’s partnership agreement, Mr. McCormick was required to retire at the age of 65.  Mr. McCormick sought to stay at the firm past 65, however, the firm would not agree, and Mr. McCormick was forced to retire at age 65.

At the BC Court of Appeal, Fasken Martineau took the position that as Mr. McCormick was a partner and had an ownership interest in the firm, he was not in an employment relationship and not entitled to protection under the Code.  The BC Code guarantees freedom from discrimination in employment, but does not expressly extend the same protection to partners or independent contractors and others in non-traditional employment relationships.   

Mr. McCormick disagreed, and argued that the Code should be interpreted in a broad and liberal manner to encompass non-traditional employment-type relationships.  Mr. McCormick argued that the courts and the BC Human Rights Tribunal had extended the Code’s protection to independent contractors and others in quasi-employment relationships, and the same protection should therefore be extended to individuals in a partnership.

The BC Court of Appeal agreed with Fasken Martineau and held that at common law, a partnership is not a separate legal entity from its partners.  As a partner, Mr. McCormick could not be either employed by, or an employee of a partnership of which he is a member and part owner.  As it was a “legal impossibility” for Mr. McCormick to be employed by himself, he was not entitled to the Code’s guarantee of freedom from discrimination in employment.  Mr. McCormick’s complaint was therefore dismissed for being outside of the jurisdiction of the Code.

As a result of this decision, business partners in BC are not entitled to the Code’s anti-discrimination protections.  The Code prohibits discrimination on the basis of age, race, sex, place of origin, religion, marital status, disability and sexual orientation, among other grounds.

It is unlikely that the BC Court of Appeal decision will apply in Ontario.  The Ontario Human Rights Code guarantees freedom from discrimination in contracts, and provides that every person has a right to enter into contracts “on equal terms without discrimination because of race, ancestry, place of origin, colour, ethnic origin, citizenship, creed, sex, sexual orientation, gender identity, gender expression, age, marital status, family status or disability.”  In addition to the Code, Ontario also has other legislation aimed at prohibiting discrimination in business transactions.

The BC Court of Appeal ruling may ultimately be reviewed by the Supreme Court of Canada.  Alternatively, the BC legislature may now consider amending its human rights legislation to ensure that business partners have a right to enter into business partnerships without discrimination on the basis of age, gender, race and other grounds.

 

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