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LLP Members are Workers

The Supreme Court has ruled that individuals who are members of limited liability partnerships (“LLPs”) are “workers” for the purpose of whistleblowing protection.

Legislation relating to whistleblowing provides protection for workers who make “protected disclosures”: any disclosure of facts made in good faith which the whistleblower reasonably believed tended to show that one or more of the following categories of wrongdoing had occurred:

  • Criminal offences
  • Breach of any legal obligation
  • Miscarriages of justice
  • Danger to the health and safety of any individual
  • Damage to the environment
  • The deliberate concealing of information about any of the above
 
Members of an LLP will therefore now have greater protection from retaliatory conduct by their firm, such as compulsory retirement, demotion or reduction in profit share, in response to their having made a protected disclosure. In the event of a successful claim, LLP members will be entitled to uncapped compensation based on their financial losses and injury to feelings.
  
LLPs should therefore now take particular care to document genuine business reasons for any negative actions taken in respect of any member who is an individual (as opposed to a limited company or another LLP) with a view to proving it was not in retaliation for him or her having blown the whistle on perceived wrongdoing.
 
As a result of the Supreme Court’s ruling, it appears that LLP members will also now benefit from workers’ rights relating to part-time work, national minimum wage, working time, deductions from pay and, potentially, pension auto-enrolment.

As well as being mindful of the above in their dealings with members, LLPs should update their internal whistleblowing policies and related training to ensure they apply to members who are individuals, as well as employees.
 
For further information, contact me (T: 01952 211 010; E: john.merry@lblaw.co.uk) or Will Morse (T: 01432 377152; E: will.morse@lblaw.co.uk).