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HS Financial Services - Automatic enrolment for partners
Automatic enrolment for partners
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

General Buyer Terms

This agreement is in relation to MediEstates Limited whose registered office is at 1st Floor, Pacific House, Stanier Way, Wyvern Business Park, Derby, DE21 6BF acting for and on behalf of our clients ("the Vendors"); and yourself (Buyer's Name) in relation for an introduction to a prospective sale of a business as a going concern. By registering through this agreement I agree to all terms set out below:

  1. Definitions
    In this Agreement the following terms and phrases shall have the following meaning unless the context otherwise requires:

    Business
    Dental Practice business providing dental care. This business is under the MediEstates Ltd sale terms.
    Confidential Information
    Means the actual Vendors identity and all confidential information in respect of the Business, including, but not limited to, any ideas, business methods, prices, accounts, finance, marketing, research, development, manpower plans, processes, market opportunities, intentions, design rights, product information, customer lists or details, employees’ details, trade secrets, computer systems and software, and other matters connected with the products or services manufactured, marketed, provided or obtained by the Vendor, and information concerning the Vendor’s relationships with actual or potential clients or customers and the needs and requirements of such clients’ or customers’ operations.
  2. Obligation of Confidentiality
    The Prospective Purchaser agrees to treat as confidential, information supplied by or on behalf of the Vendor in connection with the sale of the Business.
  3. Exclusions
    The obligation of confidentiality set out in clause 2 does not apply to:
    1. any information received from a third party who was legally free at the time of disclosure to disclose it;
    2. any information which was already lawfully in the Prospective Purchaser’s possession prior to receiving it from MediEstates Ltd on behalf of the Vendor; and
    3. any information which is in its entirety already in the public domain.
  4. Duties of Prospective Purchaser
    1. The Prospective Purchaser shall take such a reasonable security measures to protect the Confidential Information and trade secrets.
    2. The Prospective Purchaser shall not, without the prior written consent of the Vendor, permit any of the Confidential Information:
      1. to be disclosed, other than in confidence to its legal or professional advisors;
      2. to be copied or reproduced;
      3. to be commercially exploited in any way;
      4. to be used for any purpose other than in connection with the prospective purchase of the Business;
      5. MediEstates is registered under the Data Protection Act 1998. Upon Signing this agreement you agree to follow the legal obligations of this act to protect the details of the information supplied to you, with it no to be passed outside of the control of you the prospective purchaser.
    3. The Prospective Purchaser agrees to keep a record of Confidential Information received.
    4. The Prospective Purchaser will return to MediEstates or the Vendor all documents containing Confidential Information and all copies of those documents on demand at any time which are in its possession or under its control, and for this purpose the term “documents” includes computer discs and all other materials capable of storing data and information. The Prospective Purchaser agrees that such documents remain the property of the MediEstates on behalf of the Vendor.
    5. The Prospective Purchaser must not jeopardise or re-direct the sale under any circumstances.
    6. The Prospective Purchaser must not contact the Local Area Team or CCG regarding any practice sale, by any means of media unless written permission is granted from the Vendor.
    7. To carry out own due diligence on practice purchases and accepts that any information MediEstates has supplied is information provided by the vendor and is not responsible for its accuracy or completeness.
  5. This Agreement
    The existence of this Agreement and its terms are confidential and neither MediEstates nor the Purchaser may disclose anything about this Agreement or its subject matter or implementation to any person other than in confidence to their legal or professional advisers.
  6. Duties of Prospective Purchaser
    When buying Dental practices, finance is normally needed. Our organisation operated over more than one of the MediHoldings brand, by completing this from you agree that the information can be shared to our other organisations to avoid the need to register independently and provide the best possible service.

    MediEstates will refer you to the specialist dental lending team and MediFinancial who will contact the necessary banks, whom have preferential healthcare lending rates in some cases, to ascertain which funding is available to you.
    By signing this agreement you do not have to use any of the banks MediFinancial contact, it is just another service which we provide.
  7. Deposit for Dental Practice
    If you are interested in putting forward a formal offer in for a practice, once the offer is accepted there will be a deposit required to secure the practice sale which is dependant of the practice size. This deposit is held in a client account and will be returned to the buyer on completion of the practice sale. You the buyer, will be required to sign a deposit schedule which will cover the buyer and the seller in the event that the practice sale does not proceed.
  8. Changes to this Agreement
    Any changes made to this agreement must be authorised and signed by one of MediEstates Ltd Directors.
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