Just when you think you have mostly got a grip on the scope of UK discrimination law, along comes a whole new avenue of legal debate.
Gerry Abrams Limited -v- EAD Solicitors LLP is the first reported case of a claim for direct discrimination by a limited company. In brief, Mr Abrams was a member (partner) in EAD Solicitors LLP. It was a term of the LLP Deed that a member would retire on his reaching 62. In 2011, Mr Abrams set up his own limited company, the unsurprisingly-named Gerry Abrams Limited, and with EAD’s agreement it became a member in his place and was paid fees equivalent to the profit share he would have received as an individual member. When Mr Abrams reached 62 in 2014, EAD discontinued GAL’s fees, and it was effectively “retired”.
If Mr Abrams had still been an individual member then his compulsory retirement would probably have been lawful following the Seldon saga (fixed retirement age in law firm Partnership Deed upheld as justified). However, to take the perhaps obvious point, although Mr Abrams was 62, he was no longer the member. GAL had replaced him, and it was scarcely 2, not 62.
On the face of it, this was a breach of the Membership Deed. However, surely this was not a point anyone would take, given that Mr Abrams, as owner of GAL, knew full well that he would have to stop working at that point? Alarmingly, however, GAL started Employment Tribunal proceedings for associative discrimination, i.e. discrimination by A (EAD) against B (GAL) due to the protected characteristic (here age) of C (Abrams).
His claim relied on the definition of “direction discrimination” in Section 13 Equality Act. A person (A) discriminates against another (B) if because of a protected characteristic (though not necessarily B’s) A treats B less favourably than A treats or would treat others. In addition, there was a rare public outing for the specific provisions in Section 45 Equality Act, i.e. that an LLP must not discriminate against any of its members. Neither Section 13 nor Section 45 require that the person or member be a natural individual. It could very easily be said that this is the product of the Government’s failure to conceive that anyone would try this sort of case, rather than of any deliberate consideration. Nonetheless, the Liverpool Employment Tribunal concluded that this omission meant that both sections could apply to protect corporate entities as well as individuals. However, said the Tribunal, this would only be the case where “the corporation in question reflects the characteristics of one individual (or possibly the protected characteristics of more than one individual or a group of individuals) where the grounds upon which the actions taken towards the corporation are claimed to be based on the individual’s (or group’s) protected characteristics“.
Within the pure employment sphere this is less significant than it sounds. Many individuals supplied to an end user by their own company will potentially be workers and so protected against discrimination in their own right anyway. However, in the world outside employment (genuine consultancy, supply of goods and services, etc.), the consequences could be critical. If I choose not to deal with your company (or only on less favourable terms) because I have taken against your staff on racial or religious grounds, for example, then the individuals can do nothing about it because they are not my employees or workers. Your company, on the other hand, could now sue me for its loss arising from my choice not to use it. There is still the Liverpool Tribunal’s pre-condition that the company should “reflect the protected characteristics of the individuals”, but logically I am not sure that this is correct – if I refuse to deal with a company because the individual salesman it sent me offends my religious or racial convictions, why is that not still treating that company less favourably on the grounds of a protected characteristic?
Next step in Gerry Abrams is a hearing on the merits of the actual discrimination claim. It will be very much worth keeping an eye on that one!