Clyde & Co LLP v Van Winkelhof

An equity member of an LLP may be a limb (b) worker under section 230(3) of the Employment Rights Act 1996. The decisive question is whether the statutory exclusion applies. A person recruited to work as an integral part of the LLP’s operation, and contractually required to devote full-time attention to it, is not carrying on an independent profession or business of which the LLP is a client or customer.

For territorial jurisdiction, the employment or working relationship must have a stronger connection with Great Britain and British employment law than with the foreign country where the work is principally performed. An employment tribunal may properly find that connection where the worker is a member of, and performs material work for, a British firm.

The claimant was an English-qualified solicitor and an equity member of a London-based LLP. She worked principally in Tanzania in connection with the LLP’s business, but also worked in London. After reporting alleged bribery, she was suspended and later expelled from the LLP. She brought whistleblowing and sex- and pregnancy-discrimination claims.

At a pre-hearing review, the Employment Tribunal held that it had territorial jurisdiction over both claims, but decided that the claimant was not a limb (b) worker under section 230(3) of the Employment Rights Act 1996. The claimant appealed that ruling. The respondents cross-appealed on territorial jurisdiction and separately appealed a disclosure order. The central issues were whether an LLP equity member could satisfy the limb (b) definition and whether the Tribunal could hear claims arising from work principally performed abroad.

1. The claimant’s appeal was allowed. The Tribunal’s conclusion that the claimant fell within the client-or-customer exclusion in section 230(3)(b) of the Employment Rights Act 1996 was erroneous. The EAT declared that she was a limb (b) worker.

2. Section 230(3)(b) required a contract, a personal undertaking to perform work or services, performance for the other contracting party, and a contracting party which was not the client or customer of a profession or business carried on by the individual. The claimant satisfied the requirement that her services were for the LLP. The Employment Judge had found that she worked for its benefit and was first and foremost a member of it.

3. The exclusion required both that the claimant carry on a profession or business undertaking and that the LLP be its client or customer. The claimant had been recruited by the LLP, was an integral part of its operation, and was contractually required to give it her full-time attention. She could not offer her professional services to others. A profit-related element of remuneration did not make the LLP her client. The question was fact-sensitive and authorities concerning whether partners were employees under limb (a) did not determine the distinct limb (b) issue.

4. The cross-appeal was dismissed. Applying the territorial-jurisdiction approach in Lawson, Duncombe (No 2) and Ravat, the Tribunal was entitled to find a sufficiently strong connection between the claimant’s working relationship, Great Britain and British employment law. That conclusion applied to both the whistleblowing claim under the Employment Rights Act 1996 and the discrimination claim under the Equality Act 2010.

5. The disclosure appeal was dismissed. It was contingent on the respondents succeeding on the jurisdictional appeals. The matter was remitted to the Employment Tribunal for a substantive hearing of all claims.

• Employment Appeal Tribunal: Allowed the claimant’s appeal, declared her a limb (b) worker, dismissed the respondents’ cross-appeal and disclosure appeal, and remitted all claims for substantive hearing: [2012] UKEAT 168_12_2604.
• Employment Tribunal: At a pre-hearing review, held that the claims were territorially justiciable but that the claimant was not a limb (b) worker. The reserved judgment was promulgated on 1 July 2011.