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Equity Partner of an LLP is entitled to statutory employment protection
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The Employment Appeal Tribunal has recently ruled that an equity partner of a limited liability partnership is a worker for the purposes of bringing a whistle blowing claim.
In Bates van Winkelhof v Clyde & Co LLP and another UK EAT 0568/11 Ms Bates van Winkelhof was an equity partner of Clyde & Co LLP. Ms Bates von Winkelhof was seconded to Ako Law (a Tanzanian law firm) and asserted that the managing partner of Ako Law admitted to her that he paid bribes in order to secure work and obtain favourable outcomes. These allegations are denied by Clyde & Co LLP. Ms Bates von Wilkelhof disclosed this information to the money laundering officer of Clyde and Co LLP and the following day she was dismissed by Ako Law, suspended by Clyde & Co LLP and later expelled from Clydes partnership.
Ms Bates van Winkelhof subsequently brought a claim for whistle blowing (on the basis that she had been subjected to a detriment after making a protected disclosure) sex discrimination and/or pregnancy discrimination, as prior to her dismissal she had notified Ako Law that she was pregnant. The central issue in the case was whether or not Ms Bates van Winkelhof was eligible to bring a whistle blowing claim. One of the eligibility requirements to proceed with such a claim is that an individual must establish that they are a ‘worker.’
At first instance the Tribunal held that Ms Bates van Winkelhof could not proceed with this claim, as she was not a ‘worker’ under the Employment Rights Act 1996, as she was in business in her own right. Under section 45 Equality Act 2010 partners of an LLP have specific protection from discrimination and as such the issue as to whether or not Ms Bates van Winkelhof was eligible to pursue her discrimination claims did not arise.
Ms Bates van Winkelhof appealed the Tribunal’s decision concerning worker status. The Employment Appeal Tribunal overturned the Tribunal’s decision and directed that the case be remitted to the employment tribunal for a hearing. This hearing took place only two days ago on 18th June 2012.
This case is significant in that it is the first appellate decision confirming that an equity partner can enjoy statutory employment protection as a worker. This decision will undoubtedly cause concern for LLP’s in that it has opened the door for equity partners to be able to pursue a number of employment claims. Not only are workers permitted to bring whistle blowing claims but they are also entitled to bring claims concerning holiday pay and working time.
It is interesting to note that Clyde & Co LLP is seeking leave to appeal this decision to the Court of Appeal, but this may be merely a tactical step to prompt early settlement.
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