Can a member of a LLP be a ‘worker’ and rely on whistleblowing protections?

2 June, 2014
by: Cripps Pemberton Greenish

The Supreme Court has ruled in a recent case, Clyde & Co v Bates Van Winkelhof, that members of Limited Liability Partnerships (‘LLPs’) are workers, for the purposes of whistleblowing protection. The question of whether a partner in these circumstances can ever be an employee was unresolved by this case.

This finding could affect a number of regulated professions, such as solicitors, doctors, accountants and private equity houses who are organised as LLPs. LLPs will need to ensure that they do not take any retaliatory action against LLP members who blow the whistle, since such members will now be entitled to uncapped compensation based on actual and future losses, together with potential injury to feelings awards, if they can successfully show that they have suffered any detriment by reason of a protected disclosure.

Further, LLPs will need to consider updating internal whistleblowing policies to ensure that they apply to the LLP members, as well as other staff. LLPs will also need to ensure that members are treated in accordance with rights afforded to workers under the Working Time Regulations, Part-Time Working Regulations, National Minimum Wage Regulations and other related statutory protections which protect workers.

There is also scope to argue that LLP members may be classed as eligible ‘jobholders’ for the purposes of auto enrolment, which would mean all members would have to be automatically enrolled into pension schemes following the LLP’s staging date (save of course where the member actively elects to opt out).

The case could therefore have potentially far reaching consequences affecting a number of businesses. LLPs should ensure that they recognise their members’ status as workers, and ensure that they are treated accordingly.