Clyde & Co LLP & Anor v van Winklehof

Factual and Procedural Background

The Appellant, an English-qualified solicitor, was employed in 2005 by Company B to develop a joint venture with Company C in The Country. In 2009 Company B ended that venture but began another with Company D. Later that year Company A negotiated to acquire parts of Company B’s business, including the joint venture. On 24 December 2009 Company A offered the Appellant the status of “Equity Partner” (member) in Company A, guaranteeing her an annual profit share of 103,000. The acquisition completed in February 2010 and the Appellant signed a Deed of Adherence to Company A’s Members’ Agreement, becoming an Equity Member.

In November 2010 the Appellant reported to Company A’s money-laundering officers that the managing partner of Company D had admitted paying bribes. She alleges these reports were “protected disclosures” under the whistle-blowing provisions of the Employment Rights Act 1996 (“the 1996 Act”) and that Company A thereafter suspended, criticised, and ultimately expelled her in January 2011.

In February 2011 she lodged Employment Tribunal claims against Company A and one Senior Equity Member for sex discrimination (Equality Act 2010) and whistle-blowing detriment (1996 Act). Company A conceded jurisdiction on territorial grounds but argued that, as an LLP member, the Appellant was not a “worker” under section 230(3) of the 1996 Act. The Tribunal agreed; the Employment Appeal Tribunal overturned that decision; the Court of Appeal restored it on the basis of section 4(4) of the Limited Liability Partnerships Act 2000 (“the 2000 Act”). The present appeal is to the Supreme Court.

Legal Issues Presented

1. Whether a member of a Limited Liability Partnership can qualify as a “worker” under section 230(3)(b) of the Employment Rights Act 1996.
2. Whether section 4(4) of the Limited Liability Partnerships Act 2000 excludes LLP members from that worker status.
3. Whether the concept of “worker” requires a relationship of subordination in addition to the statutory wording.
4. Whether, if necessary, Article 10 of the European Convention on Human Rights requires a construction of the legislation that protects LLP whistle-blowers.

Arguments of the Parties

Appellant's Arguments

• The plain language of section 230(3)(b) is satisfied: she personally performed work for Company A, which was neither her client nor customer.
• No additional “subordination” requirement exists, but even if it does she was subordinate to Company A’s management board.
• Section 4(4) of the 2000 Act is confined to contracts of employment and does not affect limb (b) worker status; even if it did, she would also be a worker in a traditional partnership.
• A restrictive reading would breach her Article 10 right to effective whistle-blower protection.

Company A's Arguments

• “Employed by” in section 4(4) embraces both contracts of employment and limb (b) worker contracts; because a partner cannot be employed by her own partnership, the Appellant is excluded.
• Case law (e.g., Ellis and Cowell) shows partners cannot simultaneously be workers or employees.
• Article 10 does not compel an expansive interpretation; the UK already provides generous whistle-blowing safeguards and a wider reading would distort the legislative scheme.

Table of Precedents Cited

Court's Reasoning and Analysis

Judge Hale (delivering the lead judgment) noted that the Appellant satisfies every element of section 230(3)(b): she personally performed work under contract for Company A, which was neither her client nor customer. The Court of Appeal’s contrary result depended on reading section 4(4) of the 2000 Act as implicitly excluding LLP members from worker status. The Supreme Court rejected that construction for four principal reasons:

1. The ordinary meaning of “employed by” in section 4(4) is confined to contracts of employment, not the broader limb (b) category.
2. Had Parliament intended to exclude limb (b) workers it would have said so expressly, especially given the statutory distinction between employees and workers.
3. Section 230(5) of the 1996 Act demonstrates that when Parliament wishes to expand the concepts of “employment” and “employed” it does so expressly—an expansion absent from the 2000 Act.
4. Section 4(4) merely seeks to preserve the employment position of partners were the LLP instead a traditional partnership; it does not alter the definition of “worker.”

The Court also rejected an additional “subordination” requirement. Although subordination can assist in borderline cases, the statutory words are decisive. The Appellant could not market her services to others and was integral to Company A’s business; thus she is a limb (b) worker. Finally, while not essential to the outcome, the Court observed that denying whistle-blowing protection would raise serious Article 10 concerns.

Holding and Implications

HELD: A member of an LLP can be a “worker” under section 230(3)(b) of the Employment Rights Act 1996. The Appellant is therefore entitled to pursue her whistle-blowing detriment claim. The appeal is allowed and the case remitted to the Employment Tribunal.

Implications: LLP members who personally perform work for their firm, without treating the LLP as a client or customer, may claim statutory protections available to limb (b) workers—including whistle-blowing safeguards, wages protection, and certain working-time rights. The decision leaves open, and expressly does not resolve, whether traditional partners can simultaneously hold employee or worker status.