Can a company claim discrimination?

It has of course long been established that it is possible for a company to discriminate against someone, but the question of a whether a company can be discriminated against has not been considered, until now.

Under the Equality Act, a person is protected from discrimination as a result of less favourable treatment arising from a protected characteristic such as race, sex, age etc. The question which the Employment Appeal Tribunal (EAT) had to consider in the case of EAD Solicitors LLP v Abrams [2015] was whether a ‘person’ as defined in the Equality Act extended to protect a limited company.

The facts of the case were relatively straightforward. Mr Abrams was a member of EAD Solicitors LLP. As Mr Abrams approached retirement, he set up a limited company, of which he was the sole director. This company provided the services of Mr Abrams and replaced him as a member of the LLP and took the profit share that he would have received had he continued. Mr Abrams was approaching the retirement age for members set out in the LLP Agreement, but indicated that he, or rather his company, would not be stepping down as a member of the LLP when he reached their retirement age. EAD Solicitors LLP therefore took the decision to terminate Mr Abrams’ company’s membership of the LLP. Mr Abrams and his company both brought claims of age discrimination against EAD Solicitors LLP and the Employment Tribunal had to decide as a preliminary point whether a company could be a claimant in a discrimination claim.

The Employment Tribunal held that they could be. The Employment Judge considered that the company was entitled to bring such a claim and so directed that the claim should proceed.

The LLP appealed to the EAT. They argued that since only individuals can have the protected characteristics listed in the Equality Act, only individuals are protected from discrimination. The EAT rejected this. They said that the Equality Act does not deal with individuals on the basis of their own protected characteristics, but rather identifies discrimination as treatment caused by a protected characteristic or related to it. There was therefore nothing to require that the treatment be applied to that individual, a concept already well established in cases of discrimination by association.

The EAT also pointed out that under the Interpretation Act a ‘person’ includes a company, unless it was clear that the context provided otherwise. That was not the case here and therefore Mr Abrams’ company’s claim was allowed to proceed. Whether or not his or his company’s claim will succeed is quite another matter, and if the case progresses to hearing and is reported, we will let you know the result in due course.

If you would like to talk through a situation you are dealing with, or if you need advice on any aspect of employment law, please contact any member of the Pure Employment Law team (01243 836840 or [email protected]).

Please note that this update is not intended to be exhaustive or be a substitute for legal advice. The application of the law in this area will often depend upon the specific facts and you are advised to seek specific advice on any given scenario.