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/ 22 May 2014

New Supreme Court decision extends definition of workers to LLP members

The Supreme Court in the case of Clyde & Co v Bates van Winkelhof has decided that Limited Liability Partnership members are classed as “workers” under the Employment Rights Act 1996 (230 (3)). This has important connotations for LLPs and individual LLP members.

Ms Bates van Winkelhof was a partner at Clyde & Co, a firm of solicitors. She is claiming discrimination on the grounds of sex and that she suffered detrimental treatment as a result of making a protected disclosure (“whistleblowing”). Clyde & Co argued that, as the firm was a Limited Liability Partnership (LLP) and she was a member, she was not a worker and could not bring a whistleblowing claim. It was this discrete point that the Supreme Court were dealing with. The Court found that the correct interpretation of the relevant statutes was that LLP members were workers for this purpose and the case will be remitted back to the Employment Tribunal for a full hearing.

Individuals have different employment rights depending on whether they are classed as “employees” or “workers” under employment law. This decision means that LLP members are now afforded the protection given to “whistleblowers” under the 1996 Act as well as protection from unlawful deduction of wages and national minimum wage and working time rights. This is a significant development as there has been some uncertainty as to the status of LLP members.

The issue about the position of partners in traditional partnerships was also raised in this case. A challenge was brought to the idea that they cannot be considered employees of the partnership. As this was not at issue on the facts in this case, the Supreme Court made no ruling but they suggested that it would need to be decided within the context of an appropriate case.

It is important that LLP members are aware of their rights and the protections they are now afforded. LLPs should consider their policies and practices in light of this decision and ensure that they are dealing with any potential whistleblowing appropriately.

If you need further advice on this issue please contact one of our employment law solicitors on 020 7228 0017.

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