Worker Employment Status – LLP Member

A member of a Limited Liability partnership (LLP) can be a ‘Worker’ for the purposes of various employment rights according to a recent case decided in the Supreme Court.

Worker status

In recent years employment status of individuals has evolved. We started with two distinct relationships with staff; they were either a traditional employee or self-employed. The Employment Rights Act introduced a third status of persons, known as a Worker.

The Employment Rights Act sets out that a Worker is an individual who has entered into or works under:

1. A contract of employment; or
2. Any other contract, whether express or implied and (if it is express) whether oral or in writing, whereby the individual undertakes to do or perform personally any work or services for another party to the contract whose status is not by virtue of the contract that of a client or customer of any profession or business undertaking carried on by the individual.

Workers do not have the same full employment protection and legal rights as employees, however there are various statutory employment rights which will cover Workers as well as employees

Workers qualify for protection from detriment as a result of Whistleblowing, and in the case of Clyde & Co LLP and another v Bates van Winkelhof [2014] a Solicitor who was a member of an LLP attempted to argue that she was a Worker and therefore could pursue a claim under whistleblowing legislation.

The Supreme Court in this case had to decide if she fell within the definition of Worker in the Employment Rights Act 1996. They considered various factors including the fact that the Solicitor could not market her services to anyone other than the LLP and was an integral part of its business. The Employer argued that she could not be a Worker as there was not an element of subordination in the relationship, but the Supreme Court were satisfied that this was not necessary in order for Worker status to be made out.

The decision is significant as it widens the protection for LLP members and the scope for persons who qualify as a Worker.

What does this mean for you?

It is important to ensure that you understand the ‘status’ of anyone who works for you, including partners, members of an LLP, self-employed persons, consultants and staff. Whilst you may call the relationship something the law may view it as something else, and you probably won’t have to address the issue until a problem arises.

If you have any doubt about your staff relationships then please give me a call for a no obligation chat on 023 8098 2006 or 01983 897003.