Partners and LLP members are not ‘workers’

The Court of Appeal has overturned a controversial ruling which had suggested that partners and members of a limited liability partnership (LLP) could qualify as ‘workers’ for the purposes of certain employment legislation.

Employment law distinguishes between ‘employees’ (who enjoy a high level of statutory protection), ‘workers’ (who enjoy more limited rights) and those that are ‘self employed’ (who fall outside the sphere of employment protection almost entirely).

In Clyde & Co LLP v Bates van Winkelhof 2012, the Court of Appeal held that a member of an LLP who was a fixed-share partner (she received a fixed share of profits and actively participated in the running of the LLP) was not a worker within s.230(3) of the Employment Rights Act 1996 (ERA 1996).  The Court found that Ms Bates was not in a subordinate position and that her equal status with other partners meant that she was not a worker or an employee as defined in the ERA 1996. Therefore, Ms Bates was unable to pursue her whistleblowing claim.

The judgment can be downloaded here.

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