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Insight

Members of Limited Liability Partnerships protected by whistleblower legislation

27/05/2014
In Clyde & Co. LLP v Bates van Winklehof the Supreme Court held that members of limited liability partnerships (LLP) are workers and hence entitled to protection under whistleblowing legislation.Ms In Clyde & Co. LLP v Bates van Winklehof the Supreme Court held that members of limited liability partnerships (LLP) are workers and hence entitled to protection under whistleblowing legislation.

Ms Bates van Winklehof, a former fixed share partner of Clyde & Co., brought a claim of sex discrimination and detriment on grounds of whistleblowing following her expulsion from the LLP. She claims that prior to her expulsion she made protected disclosures that the managing partner of a Tanzanian law firm with which Clyde & Co. entered into a joint venture had admitted paying bribes to secure work and the outcome of cases.  Clyde & Co. sought to have the whistleblowing claim struck out at a Preliminary Hearing on the basis that the whistleblowing legislation did not cover members of an LLP.

The Supreme Court's finding that LLP members do have protection under the whistleblowing legislation is consistent with the underlying spirit and intention of the whistleblowing legislation but does have significant implications, particularly for those in the financial, accountancy and legal sectors. LLP members do not have the statutory protection from unfair dismissal. However, compensation for detrimental treatment under the whistleblowing legislation is uncapped and we are likely to see an increasing use of allegations of detrimental treatment on grounds of whistleblowing from disgruntled LLP members on exit from the partnership.

LLP members will also now benefit from statutory protections for part time workers, from unlawful deductions from wages, payment of the national minimum wage, rights under the Working Time Regulations and rights in respect of pension auto enrolment. Auto enrolment is a particular concern because it creates a positive duty on the employer to act, enrolling partners in the scheme and paying employer contributions. Our Head of Pensions, David Gallagher, says that he would expect the Pensions Regulator to produce some guidance on whether partnerships will now have a period of grace to implement the result of the judgment and whether contribution arrears might be necessary for the period back to the employer's staging date. If you would like to discuss this or any of the wider implications of the Supreme Court's decision please do not hesitate to contact me or a member of the team.

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