LLP members might be entitled to protection under the Transfer of Undertakings (Protection of Employment) Regulations 2006 (SI 2006/246) (TUPE).
This consideration is at least in part prompted by the outcome of the recent Bates van Winkelhof case in the Supreme Court.
Just as an LLP member can be a “worker” under section 230(3)(b) of the Employment Rights Act (as the Supreme Court found), thus gaining access to a range of rights and remedies that LLP members would not otherwise have, at least some LLP members might arguably have TUPE rights as well.
TUPE provides protection for “employees” when the “economic entity” for which they work is transferred into new ownership. They are treated as having been re-employed by the new owner on the same terms. This can apply as much to a distinct part of a business as it can to an entire business.
The key to this “LLP member with TUPE rights” argument lies in comparing the wording of the definition of a “worker” with the wording of the definition of an “employee” under TUPE Regulation 2. They are not the same but there are some important similarities.
I would suggest that questions that might arise in any particular case might be:
- Does the LLP member “work for another person whether under a contract of service or apprenticeship or otherwise”? [emphasis supplied]
- Is the LLP member’s contract (with the LLP) a contract for services?
If the answer to the first question is yes and the answer to the second is no then there is the beginning of an argument that the LLP member is entitled to TUPE protection.
If so a raft of new considerations would emerge whenever an LLP is selling off (or simply giving away) the whole or a part of its business, in particular where there are some LLP members who are not given a say in the matter of the sale and/or are not given a choice as to whether they remain as members of the selling LLP or are (or are not) offered equivalent terms by the new business owner.
This theory is entirely new and untested. But a lot of people, including respected members of the Court of Appeal, incorrectly thought that LLP members could not possibly be workers, but the Supreme Court decided otherwise. LLP members with TUPE rights is not a big jump from where we have already got to.
