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LLP members are workers and entitled to whistleblower protection

The Supreme Court has confirmed that a member of a limited liability partnership (LLP) is a ‘worker’ and therefore entitled to protection under the whistleblowing legislation.

What is a ‘worker’?

In the past, arguments about employment status centred on whether someone was an employee or self-employed. More recently however, legislation has created a third possibility: that of a ‘worker’. Workers lie in the middle ground between the traditional categories, so individuals who fail to reach the high mark necessary to qualify as an employee may still be a worker.

Why does employment status matter?

An individual’s employment status has significant implications for their employment rights and tax liabilities. Workers have less employment protection than employees (so, for example, only employees can claim unfair dismissal) but do benefit from some important rights that don’t apply to those who are clearly self-employed. Workers are, for example, protected under:

  • Part-time Workers Regulations
  • National minimum wage legislation
  • Working Time Regulations (including the right to paid holiday and limits on working time)
  • Whistleblowing legislation

Clyde & Co LLP v Bates van Winkelhof – the facts

Ms Bates van Winkelhof was a member of Clyde & Co LLP, but was expelled from the partnership shortly after making allegations of financial irregularities. She raised an employment tribunal claim under the whistleblowing legislation i.e. claiming she had suffered detriment as a result of having made protected disclosures. Her claim was initially rejected as the tribunal did not consider her to be a worker, meaning she was not protected by the whistleblowing legislation.

However, the Supreme Court disagreed, holding that she was clearly a worker. She could not market herself to anyone other than the firm, and was an integral part of the business. The fact she was not ‘subordinated’ within the workforce did not mean she could not be a worker.

Practical impact

The decision is important for many businesses, often in the financial or professional sectors, which are structured as LLPs. As their members will benefit from whistleblower protection, LLPs should review their whistleblowing policies and carefully record reasons for negative actions (such as demotion) to provide evidence these were not related to whistleblowing. LLPs should also ensure that members benefit from the other rights available to workers, as mentioned above. The decision may also have implications in relation to pension auto-enrolment.

As it was not at issue in this case, the question of whether a partner in a traditional partnership (rather than an LLP) is able to claim worker status remains unclear.

Please get in touch with your usual Brodies contact if you need further advice.

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