Tiffin v Lester Aldridge LLP

JurisdictionEngland & Wales
CourtCourt of Appeal (Civil Division)
JudgeLord Justice Rimer,Lord Justice Jackson,Sir Nicholas Wall P,Lord Justice Davis
Judgment Date11 July 2012
Neutral Citation[2011] EWCA Civ 1101,[2012] EWCA Civ 1113,[2012] EWCA Civ 35
Docket NumberCase No: A2/2010/2938,Case No: C5/2011/2656,Case No: A2/2010/2938B & A2/2010/2928C

[2011] EWCA Civ 1101

IN THE COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM THE EMPLOYMENT APPEAL TRIBUNAL

Mr Justice Silber, Mr D. Bleiman and Mr S. Yeboah

Appeal No: UKEAT/0255/10/DM

Royal Courts of Justice

Strand, London, WC2A 2LL

Before:

Lord Justice Rimer

Case No: A2/2010/2938B & A2/2010/2928C

Between:
Martin Tiffin
Appellant
and
Lester Aldridge Llp
Respondent

The Appellant appeared in person.

Mr Mark Whitcombe (instructed by Lester Aldridge LLP) appeared on behalf of the Respondent.

Lord Justice Rimer
1

There are two interim applications before me, both made by the appellant, Martin Tiffin. The first is by way of a formal application notice dated 14 June 2011 and is for liberty to rely in support of his forthcoming appeal on a witness statement adducing fresh evidence that he made on 10 January 2011. The second is by way of an informal application in his skeleton argument of 11 July 2011 for an order for the production by the employment tribunal judge of his notes of the evidence. The latter issue has, in the event, been resolved by discussion in the course of this hearing, and I will explain what the outcome of it is. The substantive appeal is due to be heard by the President of the Family Division, Jackson LJ and me on 8 November 2011.

2

The first application follows the permission to appeal that Sedley LJ gave on 3 February 2011. He thereby directed that the witness statement which Mr Tiffin had included in his court bundle should be removed from it and restored to it only with either the court's leave or with the consent of the respondent. The respondent, Lester Aldridge LLP ("LA"), a firm of solicitors, does not consent. Hence Mr Tiffin's application. Mr Tiffin, who formerly worked for LA, has appeared in person. LA has been represented by Mr Mark Whitcombe.

3

In describing Mr Tiffin as having "worked for" LA, I deliberately adopted a neutral expression since the basis on which he did so work was the issue in the employment tribunal claim that he brought against LA. More particularly, Mr Tiffin claims to have been an employee of LA and sought compensation for what he said was his unfair dismissal. LA's position was that he was a partner, or rather had been a partner, and so was not entitled so to claim.

4

The Southampton Employment Tribunal (Employment Judge Craft sitting alone), by its reserved judgment sent to the parties on 18 December 2009, agreed with LA. Judge Craft held that, for the purposes of section 4(4) of the Limited Liability Partnerships Act 2000, Mr Tiffin would have been a partner of LA within the meaning of section 1(1) of the Partnership Act 1890 and so could not have been, and was not, an employee of it within the meaning of Section 230(1) of the Employment Rights Act 1996, and it therefore dismissed his claim. To clarify that reasoning, given that LA is an LLP having a legal personality separate from its members, I should quote section 4(4) of the 2000 Act:

"(4) A member of a limited liability partnership shall not be regarded for any purpose as employed by the limited liability partnership unless, if he and the other members were partners in a partnership, he would be regarded for that purpose as employed by the partnership."

5

The Employment Appeal Tribunal, by its order of 12 November 2010, dismissed Mr Tiffin's appeal. Sedley LJ, on Mr Tiffin's application for permission to appeal, regarded it as arguable that the facts found by the ET, as summarised in paragraph 3 of the EAT's judgment, pointed rather to the conclusion that he was an employee. Mr Tiffin represented himself at the ET but had the good fortune to be represented by counsel, Ms Claire Darwin, appearing pro bono, before the EAT. As now, LA was represented by Mr Whitcombe before both tribunals.

6

It is relevant for present purposes to refer to the ET's findings of fact. The EAT, in its judgment delivered by Silber J, summarised them as follows:

"3. The Employment Tribunal found that:—

(a) The Respondent is the successor Limited Liability Partnership ("LLP") to the Lester Aldridge Partnership ("the Partnership") which was converted to an LLP on 1 May 2007. The Claimant commenced employment with the Respondent on 9 August 2001 as an Associate in the Partnership's property development team based at its Bournemouth office. On 1 October 2005, he was promoted to be a salaried partner which was a temporary measure before the Claimant was admitted as a fixed share partner ("FSP") on 1 May 2006 at which time the partnership was governed by a Partnership Agreement dated 1 November 2004. The Claimant told the Employment Tribunal that he signed the Partnership Agreement as a stepping stone to becoming a fixed equity partner in the partnership;

(b) From 1 May 2006 when the Claimant was admitted as a FSP he was paid monthly drawings (not salary) calculated on the basis of an annual fixed share of profits of £62,500 together with the benefit of 5 profit share points in the partnership, the value of which was dependent on the actual profits achieved by the Partnership in the financial year. The Claimant also became an authorized signatory on the Partnership's client and office bank account and he was required to make a contribution of £5000 to the Partnership;

(c) There were other differences from the Claimant's Associate status because first his National Insurance contribution class changed to classes 2 and 4 and second the partnership paid for additional benefits of permanent health insurance and life insurance for him and these were different to the benefits he had received as an employee. In addition, he was also required to make his own pension arrangements and he could claim motor/travel and telephone expenses for personal use as well as being responsible for dealing with his own tax and other separate arrangements made with the Respondent, who no longer considered him as an employee. Indeed, the Respondent issued a P45 to him to confirm that his last day of employment with the Partnership was on 30 April 2006;

(d) In April 2007 Mrs Cowen, a partner in the Respondent partnership. sent to all partners including the Claimant a copy of the Member's Agreement, which had been prepared in readiness for the conversion of the partnership to LLP status. She drew the attention of all partners to the differences between the draft Member's agreement and the agreed form of the updated Partnership Agreement which had been prepared in readiness for this conversion. She specifically referred to the introduction of the status of "salaried partner" as the Partnership anticipated that salaried partners would be admitted to the LLP while the Partnership Agreement did not recognize the status of salaried partners;

(e) The Claimant signed the Member's agreement dated 30 April 2007 as a FSP. The Employment Tribunal rejected a claim by the Claimant that he had been coerced as they held that the Claimant was a willing participant in the conversion of the partnership to LLP status;

(f) In addition to the Member's agreement there was also an agreement for the transfer of the Partnership's business assets and liabilities to the Respondent. The agreement also referred to the Partnership's employees and it confirmed that the Respondent would write to each of the employees on the transfer date to inform them their employment would continue with the Respondent with their continuity of their employment being preserved. The Claimant signed that agreement and he was listed in a schedule to the agreement as a FSP. Thus [he] did not receive from the Respondent a letter sent to its employees relating to the transfer of assets and liabilities which were the subject of the agreement;

(g) Eight of the Respondent's employees were admitted to be salaried partners on 1 November 2007 and in accordance with the member's agreements, they continued to have the status of employees which was specifically confirmed in the employment contracts issued to them. The Claimant also made an increased capital contribution to the Respondent in October 2007 as did all the full equity partners and the other FSPs in their appropriate proportions. The Claimant's share was the additional sum of £1,250 which he paid;

(h) Under the Member's Agreement, the claimant as a fixed share partner was entitled to vote at members meetings. On a show of hands, all equity partners had one vote while on a poll all equity partners had one vote per point. Each full equity partner has 100 points and all but two fixed share partners (which included the Claimant) had five points each. Two fixed share partners had ten points each. Some decisions were subject to a special poll vote where each full equity member had five votes, FSPs with less than five points had two votes and a FSP with more than five points had three votes. Salaried partners had no voting rights and could only attend partners' meetings by invitation;

(i) A FSP was defined in the Member's agreement as a member of the Respondent and the Claimant's membership of the Respondent was terminated in accordance with the terms of the Member's Agreement which involved serving a Provisional Dismissal Notice on the Claimant and convening a meeting at which the Claimant was entitled to address those present and indeed he duly did so;

(j) Although the Claimant was instructed not to attend the Respondent's office from 14 August 2008 which was the date of the Provisional Dismissal Notice served on him, Mrs Cowen of the Respondent confirmed that the Claimant remained a partner and member of the Respondent until 14 February 2009;

(k) The Claimant confirmed that he had not made any representations to the Respondent that he was an employee until he issued the present proceedings;

(l) The Claimant...

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