Clyde & Co got a bloody nose this week when the Supreme Court ruled that one of its former equity partners was technically a 'worker' and as such entitled to be protected by whistleblowing legislation.
It's the latest installment in the mess in which the firm has found itself after kicking out partner Krista Bates van Winkelhof back in 2011. BvW claims that Clydes forced her to leave after she made allegations of corruption in the firm's Tanzanian office, and after she announced that she was pregnant. Clydes claims her departure is entirely unrelated. None of this has yet been tested in court and the matter is likely to be heard in the autumn.
In the meantime the question arose as to whether BvW could be protected by whistleblowing legislation as she was a partner rather than an employee. The Court of Appeal didn't think so in 2012. But on Wednesday the Supreme Court overturned this and held that partners at LLPs should be deemed to be workers.
BvW was delighted - her lawyers, Mishcon, said that it was in everyone's long-term interest for partners to have whistleblowing protection. Clydes was rather less so. A spokesman said the firm was "surprised" at the decision, pointed out that the court had not looked at the merits of BvW's claim and said that "the knock-on consequences of this judgment are potentially significant and far-reaching and could affect partnerships both large and small".
They could be very significant indeed. If equity partners are technically workers then all sorts of regulations could kick in from holiday entitlement to number of hours they can work to taxation. City firms could now find themselves having to pay National Insurance Contributions on their partners' drawings. When all the other LLPs such as the accountancy firms and hedge funds are factored in, this could amount to billions. The pressure group Public Concern at Work was an interested party in the case, and expect the Inland Revenue to take a very close interest...
Tip Off ROF
It's the latest installment in the mess in which the firm has found itself after kicking out partner Krista Bates van Winkelhof back in 2011. BvW claims that Clydes forced her to leave after she made allegations of corruption in the firm's Tanzanian office, and after she announced that she was pregnant. Clydes claims her departure is entirely unrelated. None of this has yet been tested in court and the matter is likely to be heard in the autumn.
In the meantime the question arose as to whether BvW could be protected by whistleblowing legislation as she was a partner rather than an employee. The Court of Appeal didn't think so in 2012. But on Wednesday the Supreme Court overturned this and held that partners at LLPs should be deemed to be workers.
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A partner yesterday |
BvW was delighted - her lawyers, Mishcon, said that it was in everyone's long-term interest for partners to have whistleblowing protection. Clydes was rather less so. A spokesman said the firm was "surprised" at the decision, pointed out that the court had not looked at the merits of BvW's claim and said that "the knock-on consequences of this judgment are potentially significant and far-reaching and could affect partnerships both large and small".
They could be very significant indeed. If equity partners are technically workers then all sorts of regulations could kick in from holiday entitlement to number of hours they can work to taxation. City firms could now find themselves having to pay National Insurance Contributions on their partners' drawings. When all the other LLPs such as the accountancy firms and hedge funds are factored in, this could amount to billions. The pressure group Public Concern at Work was an interested party in the case, and expect the Inland Revenue to take a very close interest...
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