Fixed-share partners of law firms are not employees and cannot claim employment rights before a tribunal, the Court of Appeal has ruled. However the ruling, in a case brought by Martin Tiffin against southern England law firm Lester Aldridge (LA), applies only when fixed-share partners enjoy some of the ‘obligations and responsibilities’ of full equity partnership.

Tiffin took Lester Aldridge to an employment tribunal in 2009, alleging unfair dismissal and breach of contract. The tribunal, followed by the employment appeal tribunal, ruled that Tiffin was not an employee but a partner.

Last week, Lord Justice Rimer (pictured), sitting in the Court of Appeal, said that an agreement signed in 2007 when LA became an LLP listed Tiffin as a fixed-share partner. It was clear, he said, that Tiffin ‘intended to become a partner and accepted the changed status, new obligations and responsibilities this involved’.

LA’s equity and fixed-share partners were ‘essentially the same’, Rimer LJ said. Both must ‘contribute capital’, both shared profits and both ‘had a voice’ in the firm’s management.

Peter Garry, a consultant at Keystone Law, said the ruling creates more certainty: ‘If certain hallmarks are met, such as voting rights or a capital share, then you are a partner. If you’re a salaried partner, being taxed PAYE and without these partnership hallmarks, then you are an employee.’ However, Garry said firms should make sure they have a ‘watertight case’ on whether an individual has partner status or is an employee.