Clyde & Co LLP And Another v Bates van Winkelhof

A decision handed down in the Supreme Court could have significant implications for professionals working in Limited Liability Partnerships (LLPs).

The landmark case focuses on a senior lawyer at an international law firm who claims to have been forced to leave the firm after allegedly “blowing the whistle”.

She launched a sex discrimination claim with the Employment Tribunal and also argued that her whistleblowing activities were ‘protected’ under provisions of the 1996 Employment Rights Act.

The Employment Tribunal found the solicitor could not be described as a “worker “ under the provisions of the 1996 Act because of her professional status, but the Employment Appeal Tribunal (EAT) ruled that she was.

The law firm won an appeal against the EAT in the Court of Appeal. However this has now been overturned by a senior judge in the Supreme Court.

In handing down its landmark judgment, Lady Hale said: “In my view, the appellant clearly is a `worker` within the meaning of section 230(3)(b) of the Employment Rights Act 1996 and entitled to claim the protection of its whistleblowing provisions.
 
"That conclusion is to my mind entirely consistent with the underlying policy of those provisions, which some might think is particularly applicable to businesses and professions operating within the tightly-regulated fields of financial and legal services.
 
"The appeal must be allowed and the case remitted to the employment tribunal to determine her claim under those provisions along with her sex discrimination claim."

Expert Opinion

This decision is significant. It means that members of an LLP (Limited Liability Partnership) and partners in a traditional partnership could now benefit from a range of statutory rights and protections such as the right to protection against unlawful deduction from wages, and protection under the Working Time Regulations which regulates working hours as well as entitlements to rest breaks and paid annual leave. They will also have to be included with those workers who must be automatically enrolled into an employer’s pension scheme and make respective employer contributions under pension rules which came into force on 1 October 2012 and are still being rolled out on a staged basis. <br/> <br/>"There are however still some rights to which partners and LLP members are not entitled, as they remain the preserve of “employees”. These include the right to claim unfair dismissal, statutory redundancy pay, or protection of employment on the sale of a business. <br/> <br/>"Lady Hale said that the distinction in law is between, on the one hand, self-employed people ‎in business in their own account, who have contact with customers or clients and, on the other hand, people who provide their services as part of a profession or business undertaking carried out by someone else. Worker protection can apply to that latter category, to include LLP members, depending on the circumstances. This did not decide that such people were employees of the LLP - that point was specifically not decided. <br/> <br/>"Ironically, perhaps, when considering which partners in which firms might be caught by this, it seems that partners in larger firms are more likely to be considered to be “workers”, unless there are some who are effectively the owners and have relationship with the firm’s clients which other partners do not have. In smaller firms, which are more akin to small owner-managed businesses, partners, or some of them, may well avoid being caught by this case. <br/> <br/>"Whatever the intended logic of the case in the context of whistleblowing, in the wider context this could be seen as a classic example of unintended consequences.” <br/>