The case arose after a former equity partner with Clyde & Co, Krista Bates Van Winkelhol, who was based mainly in Tanzania where she was employed by local firm Akro Law under a join-venture agreement, was sacked after reporting concerns about alleged money-laundering. The Supreme Court had granted permission to appeal against a finding that an LLP partner was not a 'worker' protected under whistleblowing legislation. The decision in Clyde & Co LLP and another v Bates van Winkelhof means that many regulated professionals, such as solicitors, accountants and doctors, who are members of an LLP will now have the benefit of whistleblowing rights, giving them greater protection from retaliatory conduct by their firm in response to their having made a protected disclosure.
Retaliation
According to Clare Murray of leading employment firm CM Murray, who was representing the intervener Public Concern at Work, retaliation will include for example, compulsory retirement, demotion or reduction in profit share. An LLP member will be entitled to uncapped compensation based on their actual and future losses, together with an award for injury to feelings, if they are successful in showing at an employment tribunal that such treatment was an unlawful detriment by their firm on the grounds of the member having blown the whistle on wrongdoing.
LLP members, whilst not benefiting from employee unfair dismissal protection, will nevertheless potentially now have a significant range of quasi-employment protections against certain types of unlawful treatment by their firms.
A worker
Ms Bates van Winkelhof was held to be a worker under the Employment Rights Act 1996 despite her being an LLP member, as she could not market her services as a solicitor to anyone other than the LLP and she was an integral part of the LLP’s business. Subordination (which was regarded as a key requirement by the Court of Appeal) was not regarded as essential to show worker status.
The judgment overturns the Court of Appeal decision in this case. Further, whilst not expressly overruling Tiffin v Lester Aldridge LLP (2012), the Supreme Court made it clear that the approach taken in that case to the construction of s4(4) of the Limited Liabilty Partnerships Act 2000 was wrong. The correct position on 4(4) was as follows: "All that it is saying is that whatever the position would be were the LLP members to be partners in a traditional partnership, then that position is the same in an LLP".
Lady Hale (who gave the leading judgment) highlighted that the law now distinguishes between self-employed people in business on their own account who contract with customers or clients, and those self-employed people who provide their services as part of a profession or business undertaking carried on by someone else. Worker protections can apply to that latter category of people, depending on the circumstances of the individual case.
Lady Hale also considered that there was a “serious challenge” to the rule that a partner can never be an employee of a partnership, by counsel for the intervener, Public Concern at Work (John Machell QC). However as it was not necessary in this case to resolve that question, she did not express an opinion on this question which she described as being of “some complexity and difficulty”.The judgment therefore left unresolved the issue of whether a partner in a traditional partnership under the 1890 Partnership Act could be an employee of their firm (and therefore employ himself or herself), and by extension whether he or she could be a “worker” in that firm for the purposes of s230(3)(b) ERA.
Further, the Supreme Court held that the whistleblowing and worker provisions should be interpreted in line with an LLP member’s right to freedom of expression under the European Convention of Human Rights, and that it was possible to do so by interpreting the ERA provisions in a completely conventional way, without raising issues of incompatibility.
London employment law firm CM Murray LLP acted in this case for the Intervener, Public Concern at Work, the leading UK Whistleblowing charity, together with Counsel John Machell QC of Serle Court, Jonathan Cohen of Littleton Chambers and Adil Mohamedbhai of Serle Court. All the representatives for the Intervener acted on a pro bono basis.
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