Mandatory retirement age restrictions have been a bugbear for employers – and employees – for as long as there has ben retirement. But for a Vancouver law firm, the issue has been taken to the Supreme Court of Canada, which has ruled that law firms and other partnershps can force partners to retire. Why? Because they are not covered by the province’s human rights codes
After working for 40 years at Fasken Martineau DuMoulin LLP, Vancouver lawyer John Michael (Mitch) McCormick refused to retire quietly when he hit 65, alleging that his firm’s mandatory retirement policy for partners was age discrimination.
The case held large implications for law firms and accounting firms, both of which are generally structured as limited liability partnerships. Some legal observers said a ruling that went the other way could have opened the door for partners to launch human rights complaints about not just age discrimination, but gender or other discrimination as well.
Most workers no longer face mandatory retirement in Canada, but it is a common provision in the partnership agreements at law and accounting firms, although law firms often allow select partners to stay on as employees past retirement, sometimes with the title “counsel.”
At issue in Mr. McCormick’s case was whether an equity partner at a law firm or an accounting firm could be considered an employee, and therefore be covered by provincial human rights codes.
The Supreme Court, in this case, said no. The court ruled that Mr. McCormick’s status as a partner, which allowed him to vote for and stand for the firm’s board and share in the firm’s profits and losses, meant he exercised too much control over his workplace to be considered a mere employee.
“This is not to say that a partner in a firm can never be an employee under the Code, but in the absence of any genuine control of [Mr. McCormick] in the significant decisions affecting the workplace, there was no employment relationship between him and the partnership under the provisions of the Code,” the unanimous judgment, written by Justice Rosalie Abella, reads.
In a brief submitted to the Supreme Court, lawyers for the country’s major accounting firms echoed arguments made by Fasken Martineau in the case, saying partners could not be employees, since they are part-owners.
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