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Case law update: directly discriminating against companies

View profile for Maria Chadwick
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A claim of direct discrimination concerns ‘a person’ being treated less favourably because of a particular characteristic. Law protects a number of personal characteristics including a person’s race, disability, sex, gender reassignment, sexual orientation, age, religious belief, their marriage or civil partnership. A woman’s pregnancy and her maternity are also protected.

Whilst these are arguably characteristics one would only associate with humans and not companies, the Employment Appeal Tribunal [‘EAT’] recently upheld the decision of the Employment Tribunal that a company can in fact bring a claim of direct discrimination.

The EAT held in EAD Solicitors & Ors –v– Abrams UKEAT/0054/15/DM, that a company could bring such a claim on the basis of suffering less favourable treatment because of a protected characteristic of somebody associated with that company.

Mr Abrams, the first claimant, had been a member of the respondent, an LLP. Upon approaching retirement, Mr Abrams set up a company for tax reasons, the second claimant. Mr Abrams then withdrew his membership, and the company became a member of the respondent.

It was agreed that the company would receive the same level of profit share that would have been due to Mr Abrams, and that the company would provide the services of an appropriate fee earner; albeit not necessarily Mr Abrams’. This set up meant that Mr Abrams was neither an employee nor worker of the respondent, and there was no continuing contractual obligation between Mr Abrams and the respondent.

Mr Abrams and the company brought a claim of age discrimination when the respondent objected to using Mr Abrams’ services when he reached the age of 62, the age at which Mr Abrams would otherwise have retired, and the company continuing to be a member.

In recognising that a company could be a member of an LLP, that LLPs must not discriminate against members, and that ‘a person’ for the purposes of bringing a claim of direct discrimination need not be human, the EAT held that companies can bring claims of direct discrimination. Importantly, the EAT recognised that for the purposes of bringing a claim of direct discrimination, a person need only suffer less favourable treatment because of a protected characteristic, not necessarily their protected characteristic.

In adopting a purposive interpretation of the law, the EAT felt that ‘detrimental treatment can be given to any person, whether that person is natural or legal. There is no reason to restrict the class of those who can suffer a detriment if what is being complained of, and that which the statute seeks to avoid, is a detriment being suffered because of an individual's protected characteristic’.

The case has been returned to the Employment Tribunal.

If you feel that you, or your company have been directly discriminated against on a similar basis and would like further advice and assistance, please contact our discrimination team on 0175 321 6399