The case concerned allegations that the claimant, a former member of law firm Clyde and Co LLP, had been discriminated against because of her sex and subjected to detrimental treatment (including expulsion from the firm) because she had made “protected disclosures” – or blown the whistle – about alleged money laundering and bribery by a Tanzanian firm to which she had been seconded.
Although partners can already bring discrimination claims in the UK, she needed to establish that she was a ‘worker’ in order to pursue her whistleblowing claim. ‘Workers’ have an intermediate status between employees (who enjoy many statutory rights, including the right to claim unfair dismissal) and the self-employed (who have far fewer statutory rights). Workers are not as tightly protected as employees, but still have valuable rights. In addition to whistleblowing protection, they have part-time workers’ rights and the rights to paid annual leave, not to suffer unlawful deductions from their pay, to be paid the minimum wage, and to be accompanied at disciplinary and grievance meetings.
Workers
In order to be a ‘worker’, an individual must be on a contract (written or oral) that requires them to provide services personally, in circumstances where the other party is not their client or customer. The Supreme Court determined that the claimant satisfied that test: the LLP was in no sense her client or customer; she could not market her services to any other party; and she was integral to its business. This means that she can pursue her whistleblowing claim. Worryingly for old-style partnerships, the court left open the question of whether partners in such a partnership could also be ‘workers’.
The case has significant implications for those IFA businesses set up as LLPs. Operating in a highly regulated sphere and with highly paid senior staff who can afford to instruct lawyers, financial services businesses are particularly vulnerable to a whistleblowing complaint. An individual in dispute with a firm may well be able to find an instance of raising a regulatory issue (even if only in passing) and rely on this as being a ‘protected disclosure’. To succeed with a claim, he would need to establish that he reasonably believed the disclosure was in the public interest and then show a causal link between the disclosure and any detrimental treatment by the firm. Some LLP members will use the whistleblowing legislation strategically to seek to negotiate favourable exit terms, as compensation for such a claim is potentially unlimited.
As well as the merits of a claim and its obligations to regulators, a firm faced with such a claim will need to consider the possible impact on its reputation, its investors, the time spent in defending a claim and the (usually unrecoverable) cost of defending an employment tribunal claim.
