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Are LLP members employees?

In many ways a Limited Liability Partnership (LLP) is as much like a company as a partnership. Recently, an LLP member who was required to retire from the LLP claimed he had been unfairly dismissed.

The Employment Appeal Tribunal concluded that he was not an employee of the LLP and could not therefore bring the claim.

The main reason for rejecting his argument that he was, in effect, an employee was that the Limited Liability Partnerships Act 2000 provides that a member of an LLP is not to be considered an employee if, had the LLP been a normal partnership, he would have been considered a partner. If he would not, then the common law tests for determining whether he is or is not an employee are to be used.

The Employment Tribunal had been correct to consider first whether the claimant was a partner in the LLP. Having found that he was, it correctly considered the common law tests and decided that they would not have conferred employment status on him.

Says Managing Partner, Richard Cripps: “It is always important in any partnership for the legal relations between partners to be clearly defined. Partnerships can present complex issues; we can advise as necessary.”