The LLP model has been widely adopted by various professions. "Members" are still often referred to as "partners" when providing their services.
Until now there has been uncertainty as to whether certain statutory rights apply to LLP members.
The legal issue in this appeal was clear cut. Is a member of an LLP a "worker" as defined by s230 (3) (b) of the Employment Rights Act 1996 (ERA). This arose in the context of a whistleblowing claim by a former member of a legal firm which was an LLP. She had to show that she fell within the definition of a "worker" to be able to pursue this claim. The Employment Tribunal held she was not a worker. The Employment Appeal Tribunal (EAT) disagreed. The Court of Appeal overruled the EAT. Now the Supreme Court has finally decided that an LLP member is "clearly" a worker.
LLP members who wish to make a protected disclosure will not now be barred from doing so simply because of their status. They will also be protected from suffering any detriment if they make such a disclosure during and after they leave the LLP. Solicitors and Accountants in particular have to deal with compliance and regulatory issues on a regular basis and may have grounds for whistleblowing.
However, not every member of an LLP will be a worker. I am thinking of those LLPs, some created by local authorities, where some of the members are corporate entities.
LLPs should update their Whistleblowing policies to ensure that they cover members of the LLP as well as employees and other workers.
They should also review their LLP agreements as this decision has far more wide reaching implications providing a variety of other rights to members as a result of their new "worker" status. These include the following:-
• the right not to suffer an unauthorised deduction from wages (S13 ERA).
• the rights to statutory holidays, rest breaks, and maximum working hours under the Working Time Regulations 1998 (WTR)
• the right not to be subjected to a detriment for exercising rights under the WTR which is a right provided in the ERA
• the right not to suffer less favourable treatment on the grounds of part time work
• the right to be accompanied to a disciplinary or grievance hearing
LLPs may be well advised to request members to sign opt out clauses under the WTR consenting to work more than the average 48 hours over the statutory 17 week reference period. The WTR does not require "autonomous workers" to sign the opt out. However, that only applies to workers "on account of the specific characteristics of the activity in which [the worker] is engaged, the duration of his working time is not measured or pre-determined or can be determined by the worker himself". Many such professionals have to time record a minimum number of hours and the safer option would be to have them sign the WTR opt out.
The provisions of the Minimum Wage Act will also apply and whilst at first blush may look irrelevant they could have an impact if members were asked to take a temporary pay cut.
In addition LLP members may now be classed as "jobholders" for pension purposes as the pensions legislation uses a similar definition of "worker" to that contained in the ERA. If so this means that LLPs will need to automatically enrol their members into a suitable pension scheme. Specific advice should be sought on that issue including considering members opting out of auto enrolment.