“… any partner or member who agrees to devote their full time and attention to the practice may well be a “worker” …”

The case of Bates van Winkelhof v Clyde & Co in the Employment Appeal Tribunal (“EAT”) has made new law, answering the question: can an equity member of an LLP be a “worker” for the purposes of the Employment Rights Act (“ERA”)? The answer, in brief, is yes. This decision has considerable implications for professional practices.

Miss van Winkelhof was an equity member in the LLP, entitled to a fixed annual share of profit. She was expelled following her dual report to the LLP management of (a) the fact that she was pregnant, and (b) alleged bribery by a member of an associated legal practice in Tanzania.

It was accepted that as an LLP member she was entitled to protection from sex discrimination. This case concerned whether she was entitled to “whistleblower” protection rights as a “worker”.

The EAT had no difficulty in finding that she was. The case turned on whether Ms Winkelhof’s work or services were “done or performed for another party to the contract” for the purposes of section 203(3) of the ERA. The contract concerned in this case was the LLP members’ agreement. That members’ agreement contained a provision to the effect that members were to devote their full time and attention to the LLP’s practice. This is a very common provision in professional practice members’ agreements and partnership agreements alike.

The EAT Judge relied on the test set out by Mr Justice Langstaff in Cotswold Developments v Williams, to the effect that, “… it seems plain that a focus upon whether the purported worker actively markets his services as an independent person to the world in general (a person who will thus have a client or customer) on the one hand, or whether he is recruited by the principal to work for that principal as an integral part of the principal’s operations, will in most cases demonstrate on which side of the line a given person falls …” Pointing out that Ms Winkelhof, “… by agreement, precluded herself from offering her professional services to anyone but the [LLP], let alone the world at large,” the EAT Judge concluded that Ms Winkelhof was a “worker”, and thus entitled to “whistleblower” protection.

The significance for professional practices is that any partner or member who agrees to devote their full time and attention to the practice may well be a “worker”. In consequence they would (amongst other rights) have the following rights:

  • Not to suffer detriment by virtue of having made a “protected disclosure” (“whistleblowing”)
  • As a part-timer not to be treated less favourably than a comparable full-time partner
  • Equal pay for equal work

 

If you are affected by any of the issues raised in this post and would like a confidential, no obligation meeting or telephone discussion to explore how I can assist you, please contact me.

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