A solicitor introduced to an elevated role in her former firm through a historic partnership agreement can make an employment claim as an employee, a tribunal has ruled.
Employment Judge Blackwell ruled that Ella Millett was an employee for six years with east Midlands firm Sheltons, during which time the business was acquired by EHL Solicitors. The judgment means the private client solicitor can pursue a claim of constructive dismissal against the successor practice.
The tribunal heard that Millett approached the Sheltons senior partner in 2013 concerning a promotion, shortly after the firm had become an LLP. The three equity partners were nearing the end of their careers and looking for exit strategies, which included a possible merger.
An exchange of emails followed between the senior partner and Millett, during which he referred to the structure of the partnership as being ‘somewhat informal’ and carried over from terms of partnership agreements from many years ago.
Millett drafted a modern form of agreement but it was never adopted by either party.
The tribunal heard that during this time Millett, despite references to a partnership of sorts, was not required to make a capital contribution and was therefore not an equity partner.
She completed a tax return for 2013/14 on the basis of self-employment and was held out from early 2013 as a partner to the outside world.
It was submitted by EHL Solicitors that took an ‘active hand’ in the management of Sheltons, but she told the tribunal she was not involved in discussions with the partnership’s accountants.
The judge said the Sheltons existing partners believed any disagreement with Millett would be solved by a discussion, but this changed when the firm was acquired in 2016.
The judge said Millett and her senior partner were not in accordance with what the 2013 agreement meant, but it was the intention of her boss that she should have a guaranteed salary and was therefore employed.
The judge dismissed the defendant’s plea to have the case struck out, saying the claimant’s evidence needed to be heard by a full tribunal.
In a statement, EHL Solicitors said: ‘This was a preliminary hearing to determine the previous employment status of the claimant at a firm we acquired in 2016. We inherited an ongoing position and have acted in good faith throughout.
‘As is noted in the decision, the claimant had previously filed her tax affairs as a self-employed partner, prior to subsequently issuing proceedings in the tribunal on the basis of having held continuous employment status throughout. Due to this contradiction, a preliminary hearing was held to clarify this previous status, pending substantive hearing. The tribunal has determined that, contrary to the tax position as filed, the claimant was in fact an employee throughout.
‘With regards to the substantive claims made by the claimant, we consider that these have no merit and intend to defend them robustly.’