The Supreme Court of Canada released an important employment law decision on May 22, 2014. The case is McCormick v. Fasken Martineau DuMoulin LLP, 2014 SCC 39 and established that “dependency” will determine if an employment relationship exists.
The case concerned whether an equity partner in a national law firm could be considered an employee for purposes of the British Columbia Human Rights Code? The Court held that, on the facts of this case, the equity partner was not an employee for purposes of the Code.
In reaching this conclusion, the Court noted:
Deciding who is in an employment relationship for purposes of the Code means, in essence, examining how two synergetic aspects function in an employment relationship: control exercised by an employer over working conditions and remuneration, and corresponding dependency on the part of a worker. In other words, 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 more the work life of individuals is controlled, the greater their dependency and, consequently, their economic, social and psychological vulnerability in the workplace.
This simplified and refocused test is welcome given a patchwork of tests that have emerged over the years for determining whether an employment relationship or “something else” exists.
Although McCormick was only recently decided the test has been applied in a number of context. For example, under the Ontario Employment Standards Act, 2000 in Professional Recovery Equipment Inc v Mootoo, 2014 CanLII 47314 (ON LRB), 2014 CanLII 47314 (ON LRB) and under the Ontario Human Rights Code in Wing v. Niagara Falls Hydro Holding Corporation, 2014 HRTO 1472 (CanLII).
The Moral of This Story
Every case decided by the Supreme Court of Canada is significant. McCormick is a case of national importance when dealing with threshold tests that have been a source of confusion in their application.
There is no doubt that the McCormick test of control and dependency will be applied in a variety of employment law contexts (for example, when determining whether an individual is an employee or independent contractor under legislation and at common law).
While the ultimate decision will always be fact-specific it is certainly nice to have a simplified test that will continue to develop as it is applied.