Can an LLP member be a worker for the purposes of employment law legislation?

On 21 May 2014, the Supreme Court ruled that a former Clyde & Co partner was classed as a ‘worker’ for the purposes of the protection afforded by whistleblowing legislation. The decision, overturning a Court of Appeal finding in 2012, will no doubt have far reaching effects and is of particular relevance to thousands of LLP members operating in various heavily regulated areas such as law, accountancy and financial services. 

The claimant, Ms Bates van Winkelhof, had been seconded to a Tanzanian firm associated with Clyde & Co. and alleged that she was forced to leave her partner role at Clyde & Co. following her making protected disclosures about the managing partner of the Tanzanian firm. 

The case turned on the consideration of Section 230(3)(b) of the Employment Rights Act 1996 (Act). The claimant was held to be a worker under this provision of the Act, as she was precluded from marketing her services as a solicitor to any person or organisation other than the LLP. One of the key considerations of the Court of Appeal in 2012 was the issue of subordination, but the Supreme Court did not regard this as an essential factor when establishing whether the claimant was a worker or not. 

The decision was a consideration of the ‘worker’ issue only, not of the merits of the claims.  However, the effect of the decision is that the claimant will now be able to bring her claims of whistleblowing and unlawful sex discrimination in the Employment Tribunal later on this year.

This is an important decision from a policy perspective and was described by Baroness Hale when giving the lead judgment as ‘entirely consistent’ with the underlying policy of whistleblowing laws and protection afforded by them. 

Although LLP members will still not be able to benefit from protection from unfair dismissal, the result of the Supreme Court’s decision is that LLP members may now benefit from a range of other protections afforded by employment law legislation to workers (such as working time rights and protection from unlawful deductions from pay). It would therefore be surprising if further litigation on these points did not arise in the future.