Monday, 24 March 2014

UK: Scotland: Limited liability partnership is a 'company' for the purposes of equal pay claim

The opinion of the Court of Session (Inner House) in Glasgow City Council v Unison Claimants [2014] CSIH 27 was delivered last Friday. The case concerned an equal pay claim brought under the Equal Pay Act 1970 (the claim was brought before the coming into force of the Equality Act 2010). The court was required to consider whether a limited liability partnership could be regarded as a company for the purposes of section 1(6)(c) of the 1970 Act, which provides that two employers are "to be treated as associated if one is a company of which the other (directly or indirectly) has control or if both are companies of which a third person (directly or indirectly) has control".

The court (Lords Brodie, Drummond-Young and Phillip) unanimously held that for the purposes of section 1(6)(c), a limited liability partnership could be regarded as a company. Lord Brodie delivered the court's opinion and adopted the definition of company provided by Lord Hoffmann in O'Neill v Phillips [19991] 1 WLR 1092: "an association of persons for an economic purpose, usually entered into with legal advice and some degree of formality". He observed (at para. [46]):
"An LLP is an association of persons (natural or juristic). It has an economic purpose (see in particular, section 2(1)(a) of the 2000 Act). There are formal requirements for its constitution (including registration with the Registrar of Companies). It is a corporate body with a legal personality separate from its members and having limited liability. We should point out that all of the foregoing features exist in an ordinary (unlimited) Scottish partnership. Historically, partnerships were frequently referred to in Scotland as "companies". It may be, therefore, that a Scottish partnership is also a "company" for the purposes of the equal pay legislation. A decision on that point is not necessary for the purposes of the present case, however, and we express no concluded view on the matter."

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