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EAT Rules That Companies Can Claim Discrimination

30-September-2015
30-September-2015 14:15
in Employment
by James Tunley

EAD Solicitors LLP & Others v Abrams [2015] UKEAT/0054/15/DM

The EAT have recently held that a company is a person for the purposes of discrimination under the Equality Act 2010. The decision related to a limited company that was set up for tax purposes by a partner of the Appellant law firm which replaced him as a member of the LLP.

Background

This appeal involved a firm of solicitors incorporated as an LLP. The Director of the claimant, a member partner of the LLP, had set up the limited company, Garry Abrams Limited (“the Claimant”) for tax purposes, which effectively replaced him as a member of the LLP and agreed to supply the services of an equivalent fee-earner. Mr Abrams ceased to have any direct contractual relations with the LLP, however continued as the fee-earner on behalf of the Claimant.

Upon Mr Abrams turning 62, which was the age at which it had been agreed, when he was a member of the LLP, that he would retire, the LLP objected to the Claimant offering his services and subsequently ceased payments.

The Claimant and Mr Abrams brought a Tribunal claim against the LLP and it was held at a preliminary hearing in the first instance that a company could be discriminated against. The LLP appealed this decision.

The Legislation

In Mr Justice Langstaff’s helpfully structured judgment, he analysed the legislation principal to the dispute.

Section 45(2) of the Equality Act 2010 (“the Act”) provides:

            “(2) An LLP (A) must not discriminate against a member (B)”

Section 13 of the Act provides:

“(1) A person (A) discriminates against another (B) if, because of a protected characteristic, A treats B less favourably than A treats or would treat other”

Therefore Mr Justice Langstaff’s objective was to consider whether this applied to corporate bodies who can become members of an LLP pursuant to section 4 of the Limited Liability Partnership Act 2000.

The Decision

At paras 7 and 8 of the judgment Mr Justice Langstaff analysed and later relied upon section 5 of the Interpretation Act 1978 which states:

“In any Act, unless the contrary intention appears, words and expressions listed in Schedule 1 to this Act are to be construed according to that Schedule”

Schedule 1 states that “person” is said to include “a body of persons corporate” and therefore, on the face of it, the definition of “person” in section 13 of the Act must include a limited company.

The Appellant’s main submission was that discrimination must be an act against a natural person and a company cannot have the characteristics protected under the Act.

However, at para 12, Mr Justice Langstaff went on to consider the cases of Showboat v Owens [1984] ICR 65 and Weathersfield v Sargent [1995] ICR 425 which are both authorities where claimants have  succeeded despite them not personally having the protected characteristic but rather did suffer detriment as a result of another having them.

Mr Justice Langstaff also rejected the appellant’s submissions that section 27(4) of the Act, which relates to victimisation, did specifically exclude claims from persons not directly subjected to the victimisation and that should be implied across the entire Act, because he considered that section 27(4) conferred a specific exclusion which would not have been necessary if the draughtsman had not thought that “person” was capable of including a company throughout the rest of the Act.

In concluding, at para 29, Mr Justice Langstaff justified his findings by listing examples where companies could be discriminated, where if those parties discriminating could not be liable, it would be “plainly contrary to public policy”. These examples were:

(1)  A company being shunned commercially because it is seen to employ a Jewish or ethnic workforce;

(2)  A company that loses a contract or suffers detriment because of pursuing avowedly Roman Catholic ethic;

(3)  One that suffered treatment because of its financial support for the Conservative Party, or say for Islamic education;

(4)  A company not favoured because it offered employment opportunities to those who had specific disabilities

(5)  A company that suffered detriment because of an openly gay chief executive.

The effect of this decision

In our opinion this is a welcome judgment that confirms that protection from unlawful discrimination applies to companies as well as individuls.

A link to the full judgment can be found here EAD and Others v Abrams [2015]

© 2015 Chambers of Lawrence Power, 4 King’s Bench Walk, Temple, London, EC4Y 7DL. Tel: 020 7822 8822. www.4kbw.net  email jr@4kbw.net