Blog

Employment

A body corporate can now be discriminated against as well as acting in a discriminatory manner.

In EAD Solicitors LLP and ors v Abrams, the President of the Employment Appeal Tribunal upheld the Employment Tribunal’s decision and confirmed that companies as well as individuals can issue claims for discrimination.

Mr Abrams was a member of EAD Solicitors LLP (EAD). As he approached retirement he set up his own Limited Company, Garry Abrams Limited and held the position of sole Director. In November 2011 he then retired from EAD and was replaced as a Member of the LLP by Garry Abrams Limited on the understanding that it would provide a solicitor to EAD to participate in management decisions and generate fees. Garry Abrams Limited “supplied” Mr Abrams.

EAD’s LLP Agreement provided for every Member of the LLP to retire at the end of the LLP Year in which they reach 62 years of age. For Mr Abrams that was this LLP Year. As Mr Abrams was the sole Director of Garry Abrams Limited and was providing his services as a solicitor, at the end of that LLP Year EAD stopped paying Garry Abrams Limited its profit share. 

Garry Abrams Limited therefore advanced a claim for “associative discrimination” on the basis that it suffered detriment because the solicitor they provided, Mr Abrams had reached the age of 62. They alleged that all Members of EAD were entitled to a share of the profits and that to deny Garry Abrams Limited its share because Mr Abrams had reached the age of 62 was Unlawful Direct Discrimination as defined by section 13 of the Equality Act 2010 (“EqA”) relating to less favourably treatment.

Garry Abrams Limited also made reference in the claim to Section 45(2) of the EqA which governs the way in which an LLP is to treat is Members, in that it must not discriminate against a member as to the terms on which they are a member, by expelling them or subjecting them to any other detriment.

The ET found that Section 13 EqA was deliberately drafted to include “associative discrimination” which does not require the victim of the discrimination to possess the protective characteristic. Therefore both sections of the EqA could apply to protect a body corporate as well as individuals and a limited company should not therefore be subject to less favourable treatment because of the characteristics of its members or its customers. In short, the focus is not so much on the identity of the particular claimant, but on whether any disadvantage is sustained by reason of a protected characteristic of an individual.

Case law does however clarify that the treatment complained of must be linked to a protective characteristic of an individual member, but the treatment can be given to either a natural or legal person.

On Appeal, the EAT upheld the ET’s decision that, “just as a corporation can be a discriminator so too can it be a person on the receiving end of mistreatment.” 

What does this mean for you or your business?

When dealing with corporate bodies, deal with them carefully being mindful that they may be protected under relevant discrimination legislation as well as individuals.

What do you need to be doing now?

In the same way as you wouldn’t usually make a decision whether to employ someone based on their protective characteristic, when looking for suppliers or customers where more emphasis may be given to a company’s ‘culture’, be sure to avoid making a decision based solely on any cultural aspect that may form a protected characteristic.

Also consider if you have a Provision, Criteria or Practice that could be discriminatory to clients or customers, as the next step may inevitably be a claim for Indirect Discrimination.

Lastly, LLP Agreements may need to be redrafted to avoid the possibility of discrimination claims, in circumstances where they seek to retire former partners/members at a particular age. 

These notes have been prepared for the purpose of articles only. They should not be regarded as a substitute for taking legal advice.