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Employment Law

Legal guidance - compliance - software

09 OCT 2014

Clyde & Co LLP v Bates van Winkelhof [2014] UKSC 32; (2014) EMPLR 057

Edward  Benson

Partner

21 May 2014

Supreme Court

Lord Neuberger, Lady Hale, Lord Clarke, Lord Wilson and Lord Carnwath

Members of Limited Liability Partnerships are ‘workers’ for the purposes of the employment legislation.

B became a member of C LLP. She received a fixed annual share of the profits and profit sharing units determined by the board. She disclosed to C LLP’s money laundering officers that the managing partner of a Tanzanian law firm (with whom C LPP had a joint venture) had paid bribes to secure work and the outcome of cases. She claimed that these were protected disclosures under the whistle-blowing legislation and that she was subjected to detriments as a result, including suspension, allegations of misconduct and ultimately expelling her from the partnership.

The question was whether she was a ‘worker’ for the purposes of the whistle-blowing legislation. Section 4(4) of the Limited Liability Partnerships Act 2000 provides that members of an LLP are not to be regarded for any purposes as employed unless, ‘if [he] and other members were partners in a partnership, [he] would be regarded as employed by the partnership.’ Previous case-law established that partners cannot be employees because they are all in a contractual relationship with one another so a partner ‘would be both workman and employer, which is a legal impossibility’. But previous case-law has not dealt with the question of whether partners can be ‘workers’, for which the definition is someone who works under a contract to perform personally any work or services for another party to the contract, other than for a client or customer of a profession or business undertaking.

The Supreme Court held that B had contracted with the limited partnership to perform work personally and so was a ‘worker’. Section 4(4) of the 2000 Act did not change that.

Comment: This has wider consequences than just for the whistle-blowing legislation. ‘Workers’ have various rights and employers of workers have various obligations. For example, employers may have to consider ‘auto-enrolment’ into pension schemes for members of an LLP.
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