June 25, 2014

Equity Partner was “worker”

The previous stages of this case, regarding whether a junior equity partner is a worker, have been reported in earlier editions of the Update. The case concerned a junior equity partner in a LLP and whether or not she qualified as a worker within the meaning of "worker" under the ERA and was therefore able to pursue a whistle blowing claim. The Tribunal held that she was not a worker and so could not pursue her whistle blowing claim, but this was overturned in the EAT. The Court of Appeal in turn overturned the EAT in holding that she was not a worker on the basis of the Limited Liability Partnerships Act 2000.

However the Supreme Court held that she clearly was a worker and entitled to bring a whistle blowing claim. The Supreme Court held that the relevant section in the Limited Liability Partnerships Act did not mean that partners in a LLP could only be workers within the meaning of the ERA if they would also have been workers had they been partners in a traditional partnership. In drafting the legislation, Parliament had not expressly excluded workers within the meaning of the Limited Liability Partnership Act. Furthermore there is not a specific definition of worker in the LLPA in the way that there is in the ERA. The Court did not consider it was possible to construe the wording of the LLPA by referring to the extended definition in the ERA because that definition only referred to the ERA and not other legislation. In doing so, the Supreme Court agreed with the EAT that she was worker because she could not market her services to anyone other than clients of the LLP and she was an integral part of their business.

This case is significant because it provides members of an LLP with a range of other rights beyond the ability to bring a claim for detriment in relation to whistleblowing, which are available to workers. Amongst other things, this includes the right to paid annual leave and the right to be auto enrolled in a pension scheme.

This legal update is provided for general information purposes only and should not be applied to specific circumstances without prior consultation with us.

For further details on any of the issues covered in this update please contact Gemma Ospedale, Partner in Employment on 020 7583 2222.

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