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Dental Times - Automatic enrolment for partners
01332 609318
14 December 2017
A ruling by the Supreme Court could mean that partners in an LLP might have to be considered for automatic enrolment. We look at the court's findings and The Pensions Regulator's interpretation.

Background

An equity partner in an LLP (Ms Bates Van Winklehof) was expelled from the partnership after she had whistleblown on suspicious activity taking place in an associated company.

Under the Employment Rights Act (ERA) 1996, workers who whistleblow have protection against unfair dismissal. Ms Bates Van Winklehof believed that she should have been afforded this protection.

Legal wranglings

The key question was whether a partner in an LLP could be considered a worker under the ERA. As the case made it's way through the legal system, different interpretations emerged.

A ruling by the Supreme Court could mean that partners in an LLP might have to be considered for automatic enrolment. We look at the court''s findings and The Pensions Regulator's interpretation.

Background

An equity partner in an LLP (Ms Bates Van Winklehof) was expelled from the partnership after she had whistleblown on suspicious activity taking place in an associated company.

Under the Employment Rights Act (ERA) 1996, workers who whistleblow have protection against unfair dismissal. Ms Bates Van Winklehof believed that she should have been afforded this protection.

Legal wranglings

The key question was whether a partner in an LLP could be considered a worker under the ERA. As the case made it's way through the legal system, different interpretations emerged.

Stage Are partners in an LLP "workers" under the ERA?
Employment Tribunal No
Employment Appeal Tribunal Yes
Court of Appeal No
Supreme Court Yes



Ultimately, the Supreme Court ruled that a partner in an LLP is a worker for the purposes of the ETA, and therefore should have whistleblowing protection.

The Pensions Regulator's (TRP) interpretation

TRP now say that because of this ruling, partners in an LLP might have to be treated as workers for automatic enrolment. They also say that this ruling should be applied retrospectively.

This means that if there are partners of an LLP in an employer who has already staged, they will need to be assessed. If they are treated as eligible jobholders, then they will have to be automatically enrolled now, and employer back contributions will need to be paid from the staging date.

Action points

If you have any clients who might be affected by this ruling, the first port of call should be TRP's Compliance and Enforcement bulletin that summarises the ruling and TRP's interpretation.

Remember that even if a partner is treated as a worker and the employer duties apply, they might not have to be automatically enrolled. For example an equity partner with no other income will not have qualifying earnings and so would simply be treated as an entitled worker.

If, having read through the TRP guidance there are still some doubts, legal advice should be sought.
Posted by: Anne Barker on 10 Dec 2014