Employment Status

Two recent cases have impacted on the law of employment status. Firstly, in the case of Secretary of State for Business, Innovation and Skills v Knight, the Employment Appeal Tribunal held that an employee for the purposes of the Employment Rights Act 1996 did not have to receive pay in order to gain that status. In this case, the individual was the Managing Director and sole shareholder of her employer. She had forgone salary for a period of two years in the attempt to keep the company afloat, which subsequently failed. She then claimed a redundancy payment from the Insolvency Service under section 166 of the Employment Rights Act 1996. This was originally denied as the Insolvency Service stated that she was not employee by virtue of the fact that she had not been paid.
Secondly, in the Supreme Court case of Clyde & Co v Bates van Winkelhof, it was held that a member of the LLP had worker status and could thus claim the associated rights that come with that status. This particular case involved a fixed share equity partner of a firm of solicitors. The partner had brought a claim under the whistle blowing provisions and the point for appeal concerned whether the Claimant was a worker or not and thus entitled to claim protection under the whistle blowing provisions. The case has been remitted back to the Employment Tribunal to be heard on its merits. It is nevertheless an important decision concerning LLP member status when considering a number of worker rights.