The Cross-Over of Employment Law in Partnerships

Equity partners (including members of LLPs) do not qualify for many employment protection rights but they do have the right not to suffer unlawful discrimination (namely the right not to be discriminated against on grounds of age, disability, sex, sexual orientation, race, religion/belief, pregnancy, gender reassignment or marriage/civil partnership per the Equality Act 2010).

Firms should note that it is not possible  to preclude a partner from pursing their right not to be unlawfully discriminated against in the partnership agreement, any such clause will be void (Clyde & Co LLP and another v Winkelhof [2011]). If faced with a discrimination claim – what should a partnership (or LLP) do?

Perhaps the first thing to consider is whether the Employment Tribunal has jurisdiction to hear the claim – has it been brought outside of the 3 month time limit? If brought in time ensure the tribunal timetable is adhered to – to avoid adverse cost-related or default judgment orders.

Wherever possible witness statements should be prepared and signed early to ensure that the firm’s response is consistent with the evidence. If there has been a fall-out with one partner (i.e. the person bringing the claim) there is a risk that other key witnesses may themselves leave or fall out with the firm.

Consideration should be given to whether this is a matter that should be fought or settled. If settlement is an option then be clear of the parameters. Having a clear settlement strategy will avoid the risk of entrenchment, escalating costs (and stress) and damaging ‘last minute deals’.

If the partner is to continue with the firm then be alive to issues of victimisation (i.e. less favourable treatment because a claim has been brought) – clearly, the fewer claims that have to be defended the easier and cheaper it will be!

Consider updating policies and procedures and making sure that partners are properly trained on diversity and discrimination issues; or learning from mistakes if a claim has already been made, should reduce the risk of future discrimination claims.