The Supreme Court has today handed down its much anticipated decision in Clyde & Co LLP and another v Bates van Winkelhof. In overturning the Court of Appeal's decision and determining that members of limited liability partnerships ("LLPs") are workers for the purposes of the Employment Rights Act 1996, the Supreme Court has extended to LLP members the benefit of whistleblowing protection and various other rights linked to that status.
This decision is particularly significant for the professional services and investment sectors, given that most firms in those sectors operate using an LLP structure. The Court's decision has opened the door to disgruntled members bringing (or at least threatening) to bring a claim if they consider they have suffered any detriment on account of having blown the whistle. There is no cap on the compensation that may be awarded where such claims are made out and therefore the judgment may provide members with a valuable bargaining chip during contentious exit negotiations. The judgment does, however, leave open the question of what the position would be in a traditional partnership.
The decision represents a victory for those who have campaigned for whistleblowing protection to be broadened, including the whistleblowing charity Public Concern at Work which intervened in the appeal on public interest grounds. In fact, the ruling may just have brought forward a change that was already in the pipeline. In its recent consultation on the whistleblowing regime, the Government expressly asked respondents to consider whether the current regime excludes any groups of persons that may need whistleblowing protection. It is quite likely that the outcome of the consultation would have been the express extension of whistleblowing protection to LLP members (given that they are already protected from discrimination, which is often viewed as analogous); it may yet lead to protection being extended to other individuals such as non-executive directors, volunteers, etc. The results of the consultation are expected shortly.
In addition to whistleblowing protection, the decision means that LLP members benefit from other statutory rights and protections available to workers, including entitlement to rest breaks and paid annual leave, protection from being treated less favourably on account of part-time status and, it is likely, rights under the pension auto-enrolment regime. Firms that operate as an LLP should therefore urgently review the policies and working conditions that apply to their members to ensure compliance.