In a decision affecting many professional partnerships, the Court of Appeal has decided that an equity member of a Limited Liability Partnership cannot be classed as a ‘worker’ and therefore cannot avail herself of the employment rights that attach to ‘worker’ status.
The case before the Court of Appeal involved a solicitor who was a profit-sharing member of a Limited Liability Partnership. The claimant reported to her employer that the managing partner of a business that she was seconded to had admitted to paying bribes. The claimant was subsequently expelled from the Limited Liability Partnership and sought to claim under whistleblowing legislation that provides protection to workers.
To be able to proceed with her claim, the claimant had to satisfy the court that, notwithstanding the fact that she was a full member of the Limited Liability Partnership, she was also a ‘worker’ and therefore entitled to whistleblower protection. Upon consideration of the case the Court of Appeal concluded that the correct test was to ask whether, but for the existence of the Limited Liability Partnership, the claimant would have been a partner in a standard partnership formed in accordance with the Partnership Act 1890. If the answer to that question was positive, it would be clear that the claimant could not be a worker.
The court considered it to be a legal impossibility that a partner could be both a worker and employer.
For more information, contact our Employment Law team or call 0117 904 6000.