Supreme Court rules LLP members have whistleblower protection

by Legal Week

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22 May 2014

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THE UK SUPREME COURT has ruled that members of limited liability partnerships (LLPs) have the same protection as employees in whistleblowing cases, overturning an earlier Court of Appeal decision, Legal Week reports.

In September 2012, the lower court had determined that members of LLPs are not ‘workers' under the Employment Rights Act. The ruling means an employment tribunal application brought by a former partner at law firm Clyde & Co can now be dealt with as a whistleblowing case.

Three years ago Krista Bates van Winkelhof sought to bring a case against Clydes, alleging she had been dismissed from the firm for blowing the whistle on the managing partner of its Tanzanian associate firm after he admitted to bribery.

Bates van Winkelhof had also recently told the firm she was pregnant. Clydes argued that, as a partner, she could not be treated as a worker and had no protection when she was expelled.

In its judgement, the Supreme Court found that LLP members are ‘workers' for the purpose of employment legislation and therefore have the same protections as employees.

The decision now paves the way for Bates van Winkelhof's case to be fully heard at an employment tribunal in September 2014.

Responding to the decision, Clydes said: "We strongly deny Ms Bates van Winkelhof's still untested allegations. We contend the process of her removal from the partnership was set in place before her pregnancy was known, and before her disclosures.

"Her refusal throughout to follow the dispute resolution mechanism available within the partnership agreement remains a disappointment."

Bates van Winkelhof was represented by Joanna Blackburn, head of employment at Mishcon de Reya, who instructed Matrix Chambers' Tom Linden QC, and Essex Court Chambers' David Craig and and Claudia Renton for the case. All worked pro bono.

"This case was about ensuring that lawyers, accountants, hedge fund managers and a host of other professionals are protected against dismissal if they blow the whistle about matters that they became aware of at work and which have wider ramifications for the public at large," said Blackburn, who said the decision was in everyone's long-term interest.

"Partners are the people most likely to become aware of wrongdoing in LLPs but risked being at the greatest disadvantage with respect to protection. High profile collapses like Enron and Arthur Anderson demonstrate why we need partners to speak out if they spot wrongdoing."

Clydes said it was "surprised" by the Supreme Court decision, though countered that it was "not concerned with the merits of Ms Bates van Winkelhof's underlying claims".

"Their decision was confined to the narrow point of whether a partner can be considered a 'worker' under the 1998 Act. The knock-on consequences of this judgment are potentially significant and far-reaching and could affect partnerships both large and small."

Clare Murray, who represented intervener Public Concern at Work in the case, said the decision was "all about the public interest".

"The bottom line though for LLPs is don't victimise LLP members who blow the whistle, update your policies and training to ensureyour people know they mustn't do this either," she said.

"Make sure you have a papertrail which shows your genuine business reasons (unrelated to any whistleblowing) when you exit an LLP member, demote them or reduce their profitshare."

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