Does a Mandatory Retirement Policy in a Partnership Agreement Constitute Age Discrimination under the Human Rights Code? Not in this case, says the B.C. Court of Appeal

In a recent decision of the British Columbia Court of Appeal, Fasken Martineau DuMoulin LLP v. British Columbia (Human Rights Tribunal), the Court held that an equity partner of a law firm partnership was not considered an “employee” for the purposes of the British Columbia Human Rights Code (the “Code”).

John Michael McCormick was a lawyer and equity partner at the Vancouver office of the law firm Fasken Martineau DuMoulin LLP (“Fasken”), which he had worked for since May 1970.  As an equity partner, Mr. McCormick had signed a partnership agreement which stated that he was required to retire as an equity partner at the end of the fiscal year in which he reached the age of 65, subject to any individual arrangement he had with the firm stating otherwise. Mr. McCormick was scheduled to retire from the firm as of January 31, 2011. Up to such point, Mr. McCormick had not reached any agreement with the firm as to any continuing role he may have within the firm post-retirement. Therefore, in December 2009, a few years before he was slated to retire, Mr. McCormick filed a complaint with the Human Rights Tribunal alleging that Fasken had discriminated against him by requiring that he retire at the age of 65, contrary to s. 13 of the Code.

Section 13 of the Code reads as follows:

13(1) A person must not:

(a)           refuse to employ or refuse to continue to employ a person, or

(b)           discriminate against a person regarding employment or any term or condition of employment

Because of the race, colour, ancestry, place of origin, political belief, religion, marital status, family status, physical or mental disability, sex, sexual orientation or age of that person…

Fasken’s applied to dismiss the complaint on the basis that the Tribunal did not have jurisdiction, based on the fact that Mr. McCormick was not an “employee” of the firm and that there was thus no employment relationship that could be the subject of a complaint under the Code. The Tribunal dismissed Fasken’s application, agreeing with McCormick that he should be considered an employee for the purposes of the Code.  Fasken sought judicial review of the Tribunal’s decision, but the Chambers Judge concurred with the Tribunal and upheld its decision. This decision was then appealed to the Court of Appeal.

The Court of Appeal overturned the Tribunal’s decision, finding that an equity partner in a limited liability partnership (LLP) as in this case, was not an employee of the partnership for the purposes of claiming age discrimination under the Code. Mr. McCormick’s age discrimination complaint was thus dismissed. The Court’s reasoning was primarily based on the fact that under Canadian law, a partnership is not a separate entity from its individual partners, and a partner cannot be an employee of, or employed by, a partnership of which he is a member. In essence, the court held that though a partnership and its partners employ associate lawyers and other staff, a partner by virtue of his or her membership in the partnership, cannot employ him or herself.

Furthermore, the Court held that despite a broad, liberal and purposive interpretation of the Code, this did not give the Court license to extend the Code’s application to every relationship and circumstance, so as to prevent discrimination wherever it may be found.

This decision sheds some light on the issue of mandatory retirement within a partnership arrangement and makes it quite clear that a partner of a law firm cannot rely on the employment related provisions of the Code for the purposes of making an age discrimination complaint against the partnership.

Please contact Dale & Lessmann LLP if you have any further questions about this case or any of its related implications.