Implications for LLP members given worker protection

By Jacqui Piper

The Supreme Court ruling in the case of Clyde & Co LLP v Bates van Winkelhof means that members of limited liability partnerships (LLPs) now have certain quasi-employment protections and may need to be automatically enrolled into a pension scheme.

When LLPs were established in 2000 HMRC operated on the basis that members of LLPs were self-employed and they were taxed on that basis. HMRC challenged this position and, from 6 April 2014, LLP members who receive a salary are required to be treated as employees for tax and NI purposes. The position regarding LLP members who are not salaried remained unchanged.

In the Clyde & Co LLP case, Ms Bates van Winkelhof was removed from an LLP partnership allegedly as a result of her ‘blowing the whistle’ having reported alleged criminal activity. The case considered whether Ms Bates van Winkelhof was a ‘worker’ for the purposes of the Employment Rights Act 1996 and therefore able to bring claims for detriment under the whistleblowing regime and discrimination…

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