Demotion of Equity Partner - One-Off Act or Continued Act of Age Discrimination?
The Court of Appeal has determined that the demotion of an equity partner who had reached the employer's contractual retirement age was a one-off act rather than the continuing application of a discriminatory rule.
What Were the Facts of the Case?
In Parr v MSR Partners LLP, Mr Parr was an equity partner at accountants firm, MSR Partners LLP (formerly Moore Stephens LLP). Under the terms of the members' agreement, partners had a normal retirement age of 60. Mr Parr wanted to work beyond that age and his request was agreed, subject to Mr Parr continuing to work for a further two years only, and on the basis he would continue as a salaried partner only.
Mr Parr agreed to this change in status but subsequently found out the business was to be sold and that, as a salaried partner, he would miss out on any share of the sale proceeds. He brought a claim for age discrimination in the Employment Tribunal (ET).
The Decisions in the Lower Courts
The parties have argued over whether Mr Parr was in time to bring his claim. The usual deadline to lodge a claim is three months starting with the date of the act complained of. Where an act of discrimination is a 'continuing act', it will be treated as having occurred at the end of that period, meaning the time limit for bringing a claim will only start to run at the end of the 'continuing act'.
The ET considered the act of demoting Mr Parr to be a continuing act, and found the claim to have been brought in time. Moore Stephens (as it then was) appealed successfully to the EAT, which differentiated between a continuing act and a one-off conduct, leading to ongoing losses. Mr Parr then appealed to the Court of Appeal.
Justification of Court of Appeal Decision
The Court of Appeal has upheld the EAT decision. There is a distinction between a one-off decision and a continuing act. In Mr Parr's case, his demotion from equity to salaried partner was a one-off act. Had Mr Parr been dismissed rather than demoted, it would have been clear when the time limit for a claim started to run. The Court of Appeal says demotion should be treated in the same way as dismissal would have been, ie as a one-off act. This means Mr Parr's claim was indeed out of time, as the EAT had said.
What Can Employers Learn From This Case?
From an employer's perspective, it is likely to be beneficial to construe any acts of alleged discrimination as one-off acts as far as possible, in order to start the time running on the deadline for bringing a claim. This case is a useful demonstration of the significance of drawing that distinction between continuing acts and one-off acts resulting in ongoing losses.