LLP member found not to be a worker – is there a gap in your compliance documents?

12 October 2012 | David Widdowson

The Court of Appeal has recently held that a member of an LLP is not a “worker”. As a result, they cannot bring a whistle-blowing claim against the LLP.

This ruling also means that LLP members cannot claim other worker-related rights under the part-time workers legislation, the working time regulations (including statutory holiday entitlement) and unlawful deduction from wages.

While this decision (summarised below) is helpful for UK LLPs, there is a downside. If a member of an LLP does not have protection under the UK whistle-blowing legislation he or she may be less likely to risk their career in order to expose legal or regulatory malpractice.

This could cause difficulties if members are not expressly included within the protection offered under internal whistle-blowing policies. It might be argued in a Bribery Act case that the LLP did not meet the requirement to have adequate procedures to prevent bribery taking place.

It could also mean that LLPs are not advised by members of any hidden malpractice and that an embittered member, aware that they do not have legal protection if they made their disclosure on an internal basis, could decide to disclose malpractice in a public forum.

LLPs may therefore still choose to provide protection for members of an LLP either in the LLP agreement or under internal whistle-blowing policies.

Facts of the case

  • Krista Bates van Winkelhof was an equity partner at the law firm Clyde &Co (“Clyde”) and was seconded to a law firm called Ako Law in Tanzania as part of a joint venture arrangement.
  • She claimed that she told Clyde on 23 November 2010 that the managing director of Ako Law was accepting bribes.
  • She was dismissed by Ako Law and suspended (and subsequently expelled) from Clyde on 25 November 2010.
  • She argued that both the dismissal and expulsion were detriments under the UK whistle blowing legislation as they resulted from her allegations.
  • Clyde disputed her allegations and argued that, in any event, she was not able to bring a claim under the UK whistle-blowing legislation as she was not an employee or a worker.
  • The Employment Tribunal held that she was not a worker but, on appeal by Ms Bates van Winkelhof, the Employment Appeal Tribunal (“EAT”) disagreed.
  • The Court of Appeal has now overturned the EAT’s decision.
  • The Court of Appeal interpreted the relevant (but poorly drafted) wording in section 4(4) of the Limited Liability Partnership Act 2000 (“LLP Act”) to mean that Ms Bates van Winkelhof would have been considered to be a partner (and not an employee or a worker) in the event that Clyde had been a traditional partnership. As such, the relevant section in the LLP Act was to be interpreted as meaning that there was no reason to adopt a different approach to a member of an LLP. Her whistle-blowing claim could therefore not proceed.
  • Ms Bates van Winkelhof has brought a separate claim for sex and pregnancy discrimination and the Court of Appeal held that these claims could proceed to a full hearing.
  • Discrimination rights are afforded to members of LLPs and partners as well as to employees and workers. The Court of Appeal held that she had a “sufficiently strong” connection to Great Britain to ensure that the UK courts could consider her claim at a full hearing.

Resources

Clyde & Co LLP and John Morris v Krista Bates Van Winkelhof

Contact

For further information or to discuss the issues raised, please contact Emma Clark or David Widdowson on +44 (0)20 3051 5711.

Disclaimer

Content is for general information purposes only. The information provided is not intended to be comprehensive and it does not constitute or contain legal or other advice. If you require assistance in relation to any issue please seek specific advice relevant to your particular circumstances. In particular, no responsibility shall be accepted by the authors or by Abbiss Cadres LLP for any losses occasioned by reliance on any content appearing on or accessible from this article. For further legal information click here.

Copying

If you would like to copy or otherwise reproduce this article then you may do so provided that: (1) any such copy or reproduction is for your own personal use or if it is made available to any third party it is done so on a free of charge basis; and (2) the article is reproduced in full together with the contact details, disclaimer and any logos as they appear on each article.

Disclaimer

Content is for general information purposes only. The information provided is not intended to be comprehensive and it does not constitute or contain legal or other advice. If you require assistance in relation to any issue please seek specific advice relevant to your particular circumstances. In particular, no responsibility shall be accepted by the authors or by Abbiss Cadres LLP for any losses occasioned by reliance on any content appearing on or accessible from this article. For further legal information click here.

The author

David Widdowson
Senior Consultant
Employment Law
Mediation
Business Coaching
D: +44 (0) 207 036 8388
T: +44 (0) 203 051 5711
F: +44 (0) 203 051 5712

Also by the author

3 March 2021
Alternatives to Redundancies | Employers & HR Specialists
3 March 2021
UK Budget 2021: Furlough Scheme extended until September 2021
22 February 2021
UK Supreme Court Ruling – Uber Drivers Entitled to Workers’ Rights
Subscribe to our newsletter
Stay up to the minute on our latest news and insights?
International reach

We have helped clients meet their HR needs in over 70 countries across five continents.