The UK Supreme Court has ruled that LLP members are “workers” for the purpose of UK whistleblowing protections.1 Ms. Bates van Winkelhof, a member of Clyde & Co LLP, was held to be a worker under s.230(3)(b) Employment Rights Act 1996 (the Act). The Court considered that because Ms. Bates van Winkelhof could not market her services as a solicitor to anyone other than the LLP, the LLP was not her client or customer, and she was integral to the LLP’s business, she must be viewed as holding worker status. This judgment overturns the Court of Appeal decision which held that where someone is a member of an LLP, they cannot be a worker.
The case itself will now be remitted to the Employment Tribunal to hear the merits of the case. However, the Supreme Court decision has wide reaching implications. The Court’s decision is particularly significant for legal services, finance and accounting, given the extensive use of the LLP structure in those sectors.
This decision raises a number of key issues:
- LLPs must consider the risk of members bringing a claim if they consider they have suffered any detriment on account of having “blown the whistle”. This could pose a significant risk to LLPs given that compensation in whistleblowing cases is uncapped.
- LLPs must take the time to review their whistleblowing policies. Whistleblowing policies are typically contained in employee handbooks and so LLPs may need to amend them to ensure that they apply to all members.
- LLPs will now need to take care when making decisions in relation to their members. Many members will have significant knowledge of how their business is run, making them more likely to uncover wrongdoing that merits a protected disclosure under the whistleblowing legislation. LLPs will need to ensure they follow procedures and document business decisions carefully in relation to members, so they have evidence to defend any whistleblowing claims brought by disgruntled former members.
- The decision also causes wider uncertainty. In addition to whistleblowing rights, it raises the question as to whether members have other wider rights. Members may now be entitled to receive paid annual leave, to be auto-enrolled in a pension scheme and have the right not to be treated less favorably due to part-time work. These possibilities would have a significant and longstanding financial impact on LLPs.