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Fixed Share Equity Partner is not an 'employee'

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[Thanks to Rad Kohanzad, pupil at Old Square Chambers, for preparing this case summary]

In Tiffin v Lester Aldridge LLP, the Claimant was a fixed share partner within an LLP. When compared to the Equity Partners there was a substantial disparity between what the Claimant earned, the profits he received, his financial contribution, his involvement in the management of the LLP, and his voting rights. Dspite these differences, the EAT held that the ET had not erred in finding that the Claimant was a partner and not an employee.

Silber J stated that, there is no statutory provision or authority which states that for a person to be a partner s/he has to have a certain minimum number or certain minimum types of rights to vote or to participate in management decisions. Nor are there any which specify that the share of profit of a person or his or her contribution must reach a certain level before s/he can be regarded as a partner.

The fact that the Claimant had those rights and duties as well as a number of others, particularly the entitlement to a residue of the firm if it was wound up, meant that there was enough evidence for the ET to arrive at the conclusion it did and their decision could not be considered to be perverse.