Yes you can discriminate against a company (but you shouldn’t!)

Wed, 07 Oct 2015

How odd, you might think. A company can suffer a detriment under the Equality Act 2010 and so bring a claim for direct discrimination. Yet a company is impersonal and protected characteristics are highly personal that only individuals can have. How can that be?

EAD Solicitors and others v Abrams (2015) UKEAT/0054/15/DM is the case that explains all of this.

It concerned an LLP and a corporate member of that LLP. The corporate member (a limited company) was set up by a Mr Abrams and he was the sole director. He did this for tax reasons. In short, he quit the LLP and his company took his place. Everyone expected that he would in fact, through his company, provide the services he had originally provided but there was no obligation that it should be him providing them. He was thus neither an employee nor a worker.

In short Mr Abrams reached the LLP’s retirement age. Because of his age the LLP objected to his company remaining a member of the LLP.

His company claimed the LLP had subjected it to age discrimination because of Mr Abram’s protected characteristic of age. He also brought his own claim for age discrimination. Could the company bring the claim?

Langstaff P said yes and explained why.

A company can be a member of an LLP: Limited Liability Partnership Act 2000 section 4. This precedes the Equality Act 2010 and so the Equality Act should be read in light of the 2000 Act.

The Equality Act 2010 section 45(2) forbids an LLP to discriminate against a member of the LLP on the terms on which he is a member, by expelling him or by subjecting him to any other detriment.

This claim was one of direct discrimination. The wording of that section is important. It reads

“(1) A person (A) discriminates against another (B) if, because of a protected characteristic, A treats B less favourably than A treats or would treat others.”

It must be read in light of the Interpretation Act 1978. In Schedule 1, it defines the word “person” as including “a body of persons corporate or unincorporate.”

Langstaff P took the word “another (B)” to mean “another person (B)”. Therefore applying the Interpretation Act 1978 to section 13 of the Equality Act 2010, B includes a company.

The EAT rejected the argument that because only an individual could have a protected characteristic like age, sex and the like only an individual can claim discrimination. As Langstaff P pointed out, the wording of section 13 is “a protected characteristic” and not “B’s protected characteristic.” This is consistent with Attridge Law LLP v Coleman [2010] ICR 242 (where C could pursue AL for a claim of disability discrimination based on the fact she was treated less favourably because of her son’s disability).

Therefore it followed that a company could bring a claim discrimination if, for example, it was treated less favourably because of the director’s age and a comparator company would not have been treated that way.

It is important to note that the company itself does not and cannot acquire any protected characteristic. The basis of the claim is the detriment it suffers because of another person’s protected characteristic. It follows that any claimant company would have to show some link to a person associated in some way with the company and its detriment.

Written by Richard Adkinson, member of No5 Chambers Employment Group.

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