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EAD Solicitors LLP and others v Abrams: View from Littleton

Charlotte Davies writes for our monthly column “View from
Littleton Chambers” in Tolley’s Employment Law Newsletter. This article
first appeared in the October 2015 edition.

Can a limited company bring a claim that it has been directly discriminated against where it suffers detrimental treatment because of the protected characteristic of someone with whom it is associated? Yes, said the Employment Appeal Tribunal (EAT) in the recent case of EAD Solicitors LLP and others v Abrams UKEAT/0054/15/DM.

Facts

Mr Abrams was a member of a limited liability partnership (LLP). He was due to retire at 62. As he approached retirement, for tax reasons he had set up a limited company to take his place as a member of the LLP. From this point, Mr Abrams was no longer an employee or worker and had no continuing contractual relationship with the LLP; instead, his services were provided through the limited company. The limited company, as a member of the LLP, was entitled to receive the profit share that Mr Abrams would have received had he continued as a member.

When Mr Abrams reached retirement age, the LLP no longer wanted to receive his services and objected to the limited company he had set up continuing as a member of the LLP. A dispute arose over whether the limited company continued to be a member of the LLP, and whether it had suffered any detriment by reason of the age of Mr Abrams.

The issue

As a preliminary issue, the LLP argued that the limited company was not entitled to bring a claim of discrimination under the Equality Act 2010 (EqA 2010), on the basis that:

only an individual can have a protected characteristic, including for the purposes of this case, age. The thrust of EqA 2010 is directed towards individuals and is concerned with their protection;
if corporate bodies were allowed to bring such claims, a whole new class of discrimination would be created;
European provisions do not require EqA 2010 to be interpreted to include corporate bodies.

These arguments were rejected by the employment judge at first instance, and also by the EAT. The EAT held that:

Section 45(2) of EqA 2010 provides that an LLP must not discriminate against a member by subjecting it to any detriment and s 13 of EqA 2010 prohibits less favourable treatment by one person against another because of a protected characteristic.
Pursuant to the Interpretation Act 1978, “person” includes “a body of persons corporate or unincorporated”.
Therefore, s 13 of EqA 2010 is capable of holding the way in which a corporate body has been treated by an alleged discriminator as being unlawful discrimination, and under s 45 this could apply to the limited company in its capacity as a member of the LLP.
Detrimental treatment can be given to any person, whether natural or legal, and there is no reason to restrict the class of those who can suffer a detriment if it is a detriment being suffered because of an individual’s protected characteristic.

Implications

At first blush it may seem odd to think in terms of a company being the subject of discrimination, and it is fair to say that the facts of this case are relatively unusual. However, it is not difficult to see other situations in which a company may be treated less favourably by association with a protected characteristic. Examples given by the EAT include a company being shunned commercially because it is seen to employ a Jewish or ethnic workforce, or a company that loses a contract because of pursuing a particular religious ethic. This case makes clear that such treatment would be prohibited.