Morrison v Aberdein Considine & Company

A person described as a salaried partner has no legal status determined by that label alone. Whether that person is an employee depends on the true relationship, assessed by reference to the whole factual matrix. A genuine partnership agreement may be a logical and important starting point, but it cannot be conclusive where the working arrangements require examination.

There is no legal rule requiring a tribunal to consider partnership before employee status. It may adopt that order where it is appropriate. The tribunal must then assess factors consistent and inconsistent with employment, including control, autonomy, remuneration, exposure to business risk and the parties’ conduct. An appellate court will not interfere with a permissible evaluative conclusion reached after that exercise.

The claimant, a solicitor, had been a salaried partner in the respondent firm from 1995. She brought claims including unfair dismissal and statutory redundancy pay, which required employee status. The Employment Tribunal found that she was a partner rather than an employee and dismissed those claims, while a sex-discrimination claim remained outstanding.

She appealed only on the basis that the Tribunal had adopted an unlawful approach by treating the partnership agreement as its starting point. She did not pursue a perversity challenge or an alternative contention that she was a worker. The central issue was whether the Tribunal had lawfully assessed the true relationship between a salaried partner and the firm.

1. Appeal dismissed. The Employment Tribunal was entitled to conclude that the claimant was a partner, not an employee. Its conclusion was a permissible assessment of the evidence and disclosed no error of law.

2. The applicable inquiry was the employee-status analysis in Ready Mixed Concrete. Personal service and a degree of mutual obligation did not decide the question. The Tribunal had to consider whether control was sufficient and whether the remaining contractual and factual features were consistent with a contract of employment.

3. A salaried partner may or may not be an employee. The title has no particular legal status. In line with Autoclenz, a written agreement may form only part of the true agreement. Its significance depends on the circumstances, including the parties’ relative position and the way the relationship operates in practice.

4. Following Williamson & Soden Solicitors v Briars, there was no rule requiring the Tribunal to address the Partnership Act 1890 before employee status. The choice of a logical order of analysis was for the Tribunal. Here, it was legitimate to begin with a genuine partnership agreement which both parties accepted as governing many important terms, while rejecting any suggestion that the agreement alone disposed of the issue.

5. The Tribunal then examined the competing indicators. It was entitled to give weight to the claimant’s autonomy, ability to generate and manage work, managerial role, consultation about appointments, profit-related remuneration, and her long-standing conduct in holding herself out as a partner and recognising potential partnership risk. It was not required to repeat every undisputed feature, such as the absence of a capital contribution or a dissolution entitlement, in its reasoning.

6. The outstanding discrimination claims were remitted to the Employment Tribunal to proceed.

• Employment Appeal Tribunal: Appeal dismissed in [2018] UKEAT 0018_17_2908. The Employment Tribunal’s employee-status decision was upheld.
• Employment Tribunal, Aberdeen: On 19 June 2017, it held that the claimant was a partner rather than an employee. It dismissed the claims dependent on employee status, leaving the sex-discrimination claim outstanding.