Winklehof Decision - LLP Members Have Protection When Whistleblowing - DAC Beachcroft

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Winklehof Decision - LLP Members Have Protection When Whistleblowing

Published 21 May 2014

The Supreme Court has today (21 May 2014) given its long-awaited decision in the appeal brought by Krista Bates van Winklehof against Clyde & Co, following her expulsion from the firm in January 2011.

She had been taken on as a fixed share partner to develop a joint venture with a Tanzanian firm. In November 2010, she reported to the firm's money-laundering reporting officers that the managing partner of the Tanzanian firm had admitted paying bribes to secure work and the outcome of cases. 

She claimed that these were "protected disclosures" within the meaning of Section 43A of the Employment Rights Act 1996 (introduced under the Public Interest Disclosure Act 1998, which provides protection for whistleblowers). The claim has always been denied by Clyde & Co.

The claim will now proceed to trial, following today's decision at the Supreme Court to uphold the appellant's right to bring her claim in the Employment Tribunal, notwithstanding that she was a member of the firm, rather than an employee.

Reacting to the decision, Rachel Dineley, Employment Partner and Head of the Equality and Discrimination Unit at international law firm DAC Beachcroft, commented:

"The Supreme Court has reversed the decision of the Court of Appeal, made in 2012 that the Appellant could not claim to be a "worker" in the light of Section 4(4) of the Limited Liability Partnership Act 2000. The approach taken by the Supreme Court is practical and provides certainty. It makes clear that members of an LLP who undertake personally to work for an LLP may be treated as "workers" should they wish to claim protection as whistleblowers. Taking a common sense approach, Lady Hale noted that "one can effectively be one's own boss [as an owner in the business] and still be a 'worker', in the same way that a controlling shareholder and director can be.

"One would hope that this should not require LLPs to rethink how members, who raise legitimate concerns of a public interest nature, should be treated. However, it will be a timely reminder for firms that an appropriate process should be in place by which legitimate issues can be raised without fear or favour and are then handled in a clear, objective and effective manner in practice. Where there is a genuine cause for concern, a member will often be best placed to raise it and this landmark decision may give members the confidence, which they might otherwise lack, to be responsible and call others to account. Members can now have the courage of their convictions when voicing matters of public concern. 

"The incentive for LLPs to deal with such issues appropriately is clear. Although members do not have unfair dismissal rights, they do have protection from discrimination under the Equality Act and the Supreme Court has now confirmed that whistleblower protection is available too. Since there is no cap on the compensation that an Employment Tribunal can award for losses suffered by a successful claimant in a whistleblowing case, claims are best avoided. 

"What is more, the decision will serve as good authority to provide protection to members who are 'workers' for the purposes of other workplace legislation, governing working time, less favourable treatment of part-time workers and the national minimum wage."

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