Can you be your own employee?

14 Mar 2012

Whilst the benefits of being a Partner, in terms of control of a firm and remuneration, are very attractive during an appointment, some Partners may wish to also claim the benefits of being an employee following the termination of the appointment.

There has been a great deal of case law in relation to whether a Partner in a firm can also be an employee but despite this, the distinction between an employee and a Partner, especially in relation to fixed share Partners, has remained quite blurred.  Fortunately, the Court of Appeal has provided some much needed clarity on the matter.

In the case of Tiffin v Lester Aldridge LLP, the Claimant was a fixed share Partner in the firm and, after he left, he issued proceedings in the Employment Tribunal for unfair dismissal, breach of contract and a redundancy payment.  The Respondent’s position was that the Claimant was not an employee and, therefore , the Employment Tribunal did not have jurisdiction to hear his claim.  Both the Employment Tribunal and the Employment Appeals Tribunal agreed with the Respondent, finding that the Claimant was a Partner of the firm, rather than an employee of it.

The Claimant appealed to the Court of Appeal, who dismissed the appeal and provided the following guidance:

  • an individual cannot be his or her own employer, so the existence of a genuine partnership rules out employment; and
  • there is no requirement at all for a Partner to have participation in the running of the firm or a share of the profits.

This is a helpful case in that it provides clear guidance that if a person is a genuine Partner in the firm, whether or not they are involved in the running of the firm, they cannot then also be an employee.