A recently published Court of Appeal case makes clear that partners are not ‘workers’. This is an important finding as it helps to clarify the statutory rights and protections available to partners in contrast to practice employees.
What has changed?
Much of our employment rights legislation is adopted from European directives, and the term ‘worker’ is used extensively to describe who is entitled to the defined benefits and protections. Since ‘worker’ is clearly intended to be a broader term than ‘employee’ – otherwise it would simply say employee – there has been considerable debate about who else is covered by the rules.
Most partners would argue that they are very hard workers given the long hours and high pressure of their jobs. In the past, partners have certainly been successful in persuading employment tribunals to hear their cases involving, for example, worker rights such as bullying and harassment and whistleblowing. GP Partners also commonly believe that there is a statutory minimum for things like annual leave, maternity leave and rest periods, and that unless these thresholds are modified in their partnership deed the statutory minimum will apply.
The recent judgement makes clear that for a partner to be a worker ‘he would have to be both workman and employer, which is a legal impossibility’. This places partners entirely outside the sphere of employment relations.
GPs have long been faced with a confusing barrage of terms such as ‘salaried partner’, ‘fixed term partner’, ‘non-equity partner’, ‘limited liability partner’ and so on, which are intended to confer a lower status of partner. This has led some people to believe that there is a range of rights between employee and partner. The ruling reaffirms that this is not the case and that there is no ‘middle ground’. You are either a partner with no employment and social rights, or a worker/employee with full rights.
A partnership relationship is governed by ordinary commercial business law. If you are a partner, you only have the ‘rights’ which have been agreed with your partners.
This means that unless you have agreed otherwise you will have:
- No right to maternity/paternity leave
- No right to sickness leave
- No right to part-time working
- No right to claim for unfair dismissal
- Limited protection from bullying and harassment
- No right to whistleblow on your partners (though this is slightly different for GP partners)
- No health and safety at work protection
This leaves a partner with only two principal statutory ‘rights’:
- The right not be discriminated against on the grounds of sex; race; disability; religion/belief; sexual orientation; age.
- The general obligation on all partners to act in good faith towards one other
The specifics of each case will determine whether an individual is a partner or worker, but once this has been determined the rights and obligations of the parties will flow automatically.
This case re-emphasises the need for all GPs to think carefully before signing up to a partnership. You are signing away significant rights when you become a partner instead of an employee, so what are you getting in return? This is doubly true of GPs who have the additional contractual protections provided by the BMA model contract.
A partner is by definition a business owner sharing in the profits, and a critical skill for any business owner is the ability to negotiate successful business agreements. Partners are personally liable for each others actions, so the law treats them as equal in all respects and capable of defining their own rules and ‘rights’.
This is why restricted partnerships are so problematic: one partner usually gives away a lot whilst getting very little in return. This can force a court to decide whether the relationship is truly one of partnership or not, leaving a question mark over which rights should apply.
- Be absolutely certain whether you are in a partnership or employer/employee relationship and understand the rights pertaining to each.
- If you are attempting to create an unequal partnership, make sure that you take specialist advice.
- Document your ‘partner rights’ in a partnership agreement.
Daphne Robertson is the managing director of DR Solicitors.