Michelle Chance, employment partner, Kingsley Napley

Tough on whistleblowers

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  • Michelle,
    I'm an employment partner in a similar sized firm to yours with a similar work profile. I look after businesses but have a strong line in high profile claimant work.
    What you are suggesting here has the consequence that LLP members will never make protected disclosures for fear of having their membership terminated. The logical result of this, and this point seems to have drifted by LJ Elias as he strove with unnerving determination to establish the point of law that is the subject of your article, is that LLP members will now become complicit in the illegal deeds of their partners for failing to report serious matters under the LLP's whistleblowing procedure.
    This will doubtless lead to increased corruption in professional and financial services, a greater risk of death or personal injury in construction, heavy manufacturing and transport and foster a culture of secrecy that PIDA attempted to shatter.
    I find the fact that you are willing to openly advise people to ensure that LLP members are unable to seek protection for making public interest disclosures extremely troubling. PIDA should be actively embraced by all businesses, but especially LLPs as the members may be held liable for the misdeeds of their fellow members.

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  • In response to Ben's comment above, I hardly think that Michelle can be criticised for correctly summarising the implications of the judgment and for prudently advising LLPs to be careful about the drafting of agreements to avoid the impression that some LLP members are subordinate and therefore potentially workers. The answer to the obviously valid issue you pose in your comment would be for parliament to legislate to give 'real' partners some protection if they suffer any detriment because they blow the whistle. To date, parliament has not done so - something I doubt Michelle can be blamed for.

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  • Anonymous | 10-Oct-2012 2:48 pm
    "It is important for firms to ensure their members’ agreements are drafted so members below full equity are not deemed to be in a subordinate position, otherwise there is a risk they may be able to establish that they are workers for the purpose of whistleblowing complaints."
    The above advice is solely to ensure that LLP members are not protected should they blow the whistle. The only logical reason for this advice is so that the LLP can terminate a member who does blow the whistle or treat the less-favourably, otherwise, why would they need to ensure the LLP agreement is drafted in a way so as to avoid the "subordinate" argument in this context?
    In short, the theme espoused here is that the LLP can and should expel a member and bury a problem if they bring criminal activity/serious health and safety/environmental breaches to the attention of the LLP. That cannot be a sound proposition for a solicitor to advise.
    I agree that parliament should now act on the issue. I do not for one minute blame Michelle for the problem, I blame the Court of Appeal as this situation cannot have been the intention of parliament.

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  • I share Ben's (I hope, mild) discomfort. Might have looked a lot better to recast the penultimate para somewhere along these lines: "The decision raises the risk that firms will ensure their members’ agreements are drafted so members below full equity are not deemed to be in a subordinate position, for fear that otherwise there is a risk they may be able to establish that they are workers for the purpose of whistleblowing complaints." I too am a little uneasy with the implications of the advice given in the article. Interesting point (and article) though!

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  • Ben, interesting points but I'm still not convinced by your take on the article and I think it's stretching it to suggest that the article recommends that members who blow the whistle ought to be expelled from the LLP. Are you seriously saying that you would advise an LLP to draft a members agreement so as to make as many members as possible appear to be subordinate just so that they have the protection of whistleblowing legislation?
    That said, I suppose it might have been better to make the point more generally - as you will know, there are obviously other consequences of worker status which it may be more valid to seek to avoid than preventing members from having protection if they blow the whistle.

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  • Interesting points Ben but I don't see anything in the article advocating burying concerns raised by LLP members. Are you suggesting that you would advise an LLP to draft its members agreement in a form which makes it likely the members are workers, so that they will have whistleblowing protection (and the right to statutory annual leave, rest breaks, minimum wage)?

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  • There is no reason I can foresee for a lawyer to advise that the agreement should be drafted purposely to avoid protection for members under PIDA/ERA unless the intention at the time of drafting was that the members wished to retain the power to expel a member who made a disclosure without having to worry about a claim in the ET.
    If it is a consequence of a well drafted agreement because of the COA's decision then so be it, but to actually advise deliberate avoidance is ethically troubling to me.
    The advice may well be in the interests of the LLP as a body as it may avoid a significant liability, however it is of concern to me that this is the road we are now headed down, and I suggest all of us who are members of LLPs reflect on the recent cases involving rougue partners and think what would happen in certain firms had junior partners blown the whistle on big names.

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  • There is truth on both sides here. Michelle's advice is prudent because (as you will well know, Ben), all too many whistleblowing cases are based on trivial disclosures which pretend to be in the public interest but are in reality purely in the claimant's private interest. To act in the best interest of an LLP on the drafting of its agreement, it is only right to draw their attention to the fact that there is a route open to avoid such claims. However, Ben is right about the potentially chilling consequences of partners - particularly junior partners - feeling unable to speak out about genuine wrongdoing of which they become aware among the more senior ranks, for fear it could be career-ending. There are two solutions - either the Supreme Court overturns the Clyde & Co decision; or we need new legislation,

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