Corporate Bodies Can Bring Discrimination Claims
The Employment Appeal Tribunal has held that a limited company could bring a claim for direct discrimination based on the age of its principal shareholder and director.
Background
In the recent case of EAD Solicitors LLP v Abrams, Mr Abrams was a member of EAD Solicitors, a limited liability partnership (the LLP). For tax purposes, he set up a limited company (Company) of which he was the sole director and principal shareholder. The Company took Mr Abrams' place in the membership of the LLP along with the profit share that he would have received had his membership continued. In return, the Company supplied services to the LLP.
Whilst it was expected that the services would be supplied by Mr Abrams himself, there was no obligation that he do so. He had no ongoing contractual relationship with the LLP.
When Mr Abrams reached the age at which he would ordinarily have retired, the LLP objected to the Company remaining as a member and continuing to provide services.
Mr Abrams brought a direct age discrimination claim under the Equality Act, naming himself as first claimant and the Company as second claimant. The Employment Tribunal (ET) held that the Company was entitled to bring such a claim.
The LLP appealed, arguing, amongst other things, that as individuals can only have protected characteristics included in the Equality Act, only individuals, and not companies, can be protected from discrimination.
EAT Decision
In rejecting the LLP's appeal, the EAT held that the Company's claim could proceed.
In its judgment, the EAT highlighted that case law has now established that an individual can complain of discriminatory treatment based on protected characteristics of another individual. The same logic should therefore apply to companies, meaning that companies can complain of discriminatory treatment, based on the protected characteristic of another individual.
Best Practice
This is a very significant decision in discrimination law although its impact may be limited in the context of discrimination in the workplace.
Whilst the decision shows that companies can be protected from discrimination in relation to their membership of LLPs and partnerships, a large number of claims under the Equality Act require the claimant to show that they are in employment and employed under a contract to perform work 'personally', which is unlikely to apply to companies.
Partnerships and LLPs who have companies as members and employers who engage individuals to provide services through companies, should be aware of the protection against discrimination afforded to those companies.