The recent decision of the Court of Appeal in Clyde & Co v Bates van Winkelhof confirms that a 'true partner' in a traditional partnership cannot be either a worker or an employee for employment rights purposes. Nor can a member of a Limited Liability Partnership (LLP) be a worker or employee if he or she would have been a 'true partner' if the partnership had been of the traditional, unlimited, kind. Whether a partner is a 'true partner' is in turn dependent on whether it can be said that the alleged partners are 'carrying on a business in common with a view of profit.'
Subject to any successful appeal (Ms Bates Van Winkelhof is applying for leave to appeal to the Supreme Court), this means that 'true partners' and many LLP members are not entitled to many valuable employment-related rights, such as the right not to be unfairly dismissed; whistleblowing protection; rights under the Working Time Regulations (including a right to paid annual leave); and protection against unlawful deductions from wages to name but a few.
What, then, of discrimination rights ? By virtue of Section 44 of the Equality Act, LLP members are given the same protection as employees: an LLP should not, therefore, discriminate against its members or prospective members; harass its members or victimise its members. Similar protection exists for partners in traditional partnerships.
At first blush it might seem odd that partners are protected from discrimination, but not, for example, protected from the restrictions on working time found in the Working Time Regulations 1998, which are health and safety measures. However, closer examination makes the distinction more obvious. In Clyde & Co, the Court of Appeal suggested that it is a condition of worker status that the alleged worker is in a subordinate position to the other party to the contract, despite this requirement not being explicitly set out in the definition of worker. This idea of the need for subordination underpinned its ruling in that case -members of an LLP were not workers. In a true partnership, partners are expected to have autonomy regarding how they work, are not in a subordinate position, and presumably don't therefore need the protection afforded to employees and workers in relation to working time.
It seems that whoever drafted UK discrimination legislation may have felt that EU law required it to cover a wider range of individuals, including some who are not in a subordinate position to those they work with. This might seem to follow from the wording of the Equal Treatment Directive, the Race Discrimination Directive and the Equality Directive, which all refer to equal treatment 'in matters of employment and occupation'. The word 'occupation' is wide enough to include someone's regular work or profession, which suggests the Directives are intended to apply to members in LLPs.
In the 2011 case of Jivraj v Hashwani, however, the Supreme Court ruled that even EU discrimination law only protects those who are in a relationship of subordination. One of the parties in that case has asked the EU Commission to say the Supreme Court got this wrong. But assuming the court is right, that would suggest UK law goes further than strictly necessary in protecting partners against discrimination (except in the case of sex discrimination where there is a Directive specifically protecting the self-employed).
The Jivraj decision does not alter the specific protection that partners and LLP members have under UK law, but it does affect the scope of protection afforded to other workers. Essentially the Supreme Court ruled that (unless the individual falls into some other category for which specific provision is made in the legislation, such as barristers and office holders) discrimination protection in employment does not apply to an independent provider of services who is not in a relationship of subordination with the person who receives the services. Rather, the individual seeking protection must be providing services for and under the direction of another person in return for which he or she receives remuneration.