A well-drafted partnership deed now includes entitlements for holiday, sickness, study, sabbatical, compassionate, sickness, maternity and paternity leave, and even service in the armed forces.
If you pay insufficient attention to drafting the details, this is an area that can spark off a partnership dispute.
The starting point for all types of leave is that each partner should be treated fairly and equally. However, that objective is not always achievable as different partners qualify for different entitlements.
Holiday and sabbatical leave should be the least contentious as they apply to all partners. But who should have the first pick of the dates each year? Can unused leave be carried over at year-end? What should happen if several partners all want to be away during the half-term break?
Iron out these potential difficulties in advance and include dealing with them in your deed.
Other types of leave can be more contentious as they may apply only to specific individuals. For example, while no one wants to be off sick with a serious illness, this can cause enormous problems if the leave period is either (justifiably) extensive or abused.
We see differing approaches to this. There are the partners prepared to carry each other for as long as 12 months on full drawings throughout. This is often on the basis that the partnership pays for locum insurance to cover this period.
Then there are partnerships where a sick partner has to provide locum cover out of their profits after only a brief allowance funded by the partnership.
Difficulties can arise with locum insurance claims, particularly if an individual is off sick for a few days and then returns, only to go off sick again, as the insurer usually requires a definitive period of absence before any payment is made.
So in the deed you will need to consider the difference between cumulative days' and consecutive days' absence.
What happens if locums are impossible to find – will the other partners be entitled to be 'paid' for providing the additional cover? Unless specifically provided for within the deed, there is no clear entitlement for a partner to claim an additional share of profits for this.
But as long as all partners are fairly treated, there are no absolute hard and fast rules as to how to allow for these situations.
However, note that your deed must also satisfy the anti-discrimination requirements in the Equalities Act that came into force on 1 October 2010. With this in mind it is worth noting that the more generous you are in your general leave provisions, the more you may leave yourselves open to challenge, for example under a sex discrimination claim if you seek to impose a harsher regime in the case of maternity leave.
Most important though is to record what you agree on partners' leave in the partnership deed and avoid deviating from it.
- Lynne Abbess heads the Professional Services Group at healthcare solicitors Hempsons, www.hempsons.co.uk