It seems fair to say that in recent years anti-discrimination law has gone into overdrive. Not even three months have passed since we reported on the European Court of Justice’s decision in the CHEZ Razpredelenie Bulgaria AD case, which opened the door to “indirect associative discrimination”.
We now have the EAT’s decision in EAD Solicitors LLP v Abrams to add to the mix. The effect of this decision could prove significant; broadening the scope of the main anti-discriminatory legislation – the Equality Act 2010 – to “legal persons”, which would include companies, partnerships and other bodies corporate, in addition to individuals.
Previously, it was taken by many as a given that anti-discrimination legislation applied only to “natural persons” (i.e. humans). That position now looks to have been well and truly blown away.
Facts
Mr Abrams was a solicitor with, and partner of, EAD Solicitors LLP. On becoming a partner with the LLP, Mr Abrams was required to sign a partnership agreement confirming he would retire on reaching 62. In 2011, Mr Abrams incorporated “Gerry Abrams Ltd” which replaced him as a partner of EAD Solicitors LLP. Consequently, the share of profits previously received by Mr Abrams was instead paid over to his company.
This situation continued without issue until Mr Abrams himself turned 62. At this point, EAD Solicitors LLP ceased distributing his share to Gerry Abrams Limited. EAD Solicitors LLP argued that their obligation to distribute Mr Abram’s share ceased on his turning 62.
However, Mr Abrams pointed to the fact that while the partnership agreement required retirement at 62, he was no longer a partner. Rather, Gerry Abrams Ltd which replaced him in 2011, was.
In response, Gerry Abrams Ltd launched employment tribunal proceedings against EAD Solicitors LLP on ground of “associative discrimination” on grounds of age in breach of both Sections 13 and 45 of the Equality Act 2010.
The Equality Act 2010
It is possible in law to discriminate against a particular individual in respect of a protected characteristic which that particular individual does not actually have. In years past, we have reported on the cases of Coleman v Attridge Law, which introduced the concept of associative discrimination (the Claimant in that case relying on the disability of her son) and English v Thomas Sanderson Blinds Limited which saw discrimination law evolve further with the recognition of discrimination by perception (where the Claimant relied on his work colleagues perception he was homosexual, even although he wasn’t).
This is reflected at Section 13 of the Equality Act 2010 which defines direct discrimination as:
“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”.
Gerry Abrams Ltd argued that it had been discriminated against by EAD Solicitors LLP on grounds of the age of Mr Abrams.
Further, Gerry Abrams Ltd cited Section 45 of the Equality Act 2010. This provision (which is rather more specific in scope than Section 13) requires that limited liability partnerships (such as EAD) do not discriminate against their members. As Gerry Abrams Ltd was indeed a member of EAD, section 45 was engaged.
Decision of the Employment Appeal Tribunal
In respect of both Sections 13 and 45, the EAT held that there was no legal reason to support EAD’s view that they only provided protections to natural persons. While the Equality Act itself did not define “person”, this broader understanding of that word was supported by the Interpretation Act 1978.
Turning to the basis of the discrimination claim itself, the EAT was clear that it agreed with the claimant’s position: Gerry Abrams Ltd was discriminated against by virtue of Mr Abrams’ age and his association with Gerry Abrams Ltd.
Once the EAT was satisfied Sections 13 and 45 could apply to legal persons, there was no real difficulty in it agreeing that Mr Abrams’ arguments were compatible with the Equality Act (a substantive hearing on the facts has still to take place). Just as in the case of Coleman v Attridge Law it was irrelevant that Gerry Abrams Limited could not, as a point of fact, have any particular “protected characteristic” (in this case, age). All that mattered was that it could be said the company was discriminated against through its association with a natural person who did.
Impact from an employment law outlook
From a purely statistical viewpoint, this is a potentially significant decision. As of early 2014, there was an estimated 5.2 million businesses operating in the UK. The decision in Abrams theoretically expands certain provisions of the Equality Act 2010 to cover these entities.
However, in practice, the impact is likely to be more limited. In its decision the EAT acknowledged that this matter was one with a quite unique set of facts. Further, the number of individuals in the UK who are members of an LLP, LP or simple partnerships are far fewer than the number of individuals in standard employment. For almost all “claimants” in the employment tribunal, this decision will have no impact whatsoever; most employees enter into their contracts of employment as private individuals and not as a company or partnership. Moreover, for those individuals who do provide services through a personal service company, they are already protected under Section 41 of the Equality Act 2010.
Impact from an anti-discrimination law outlook
In this area, the decision may prove more troublesome. One example of this possibility is whether a body corporate is discriminated against in respect of services provided to it or services it provides to others. For example, a widgets manufacturer may have provided widgets to a customer for a number of years, but that customer decides to stop that contract on grounds it disapproves of the manufacturer’s:
- number of ethnic minority employees; or
- number of disabled workforce; or
- the age of its workforce.
The decision of Abrams allows that manufacturer to bring discrimination proceedings against that customer on the grounds it lost business by virtue of its association with its own members of staff. While this possibility may represent another laudable step towards the eradication of discrimination in our society, there is now a danger that companies which lose a contract or fail to land particular projects on purely commercial grounds may nonetheless attempt to argue associative discrimination.
Conclusion
It remains to be seen whether this decision will live up to its theoretical significance or whether it will simply fade away; destined to be little more than an interesting footnote entry in employment law textbooks of the future. Additionally, it is unclear what impact it will have in commercial sense; whether some companies may resort to claims of associative discrimination as a knee-jerk reaction to loss of business.
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