In EAD Solicitors LLP and others –v– Abrams, the Employment Appeal Tribunal (“EAT”) decided that a limited company could bring a direct discrimination claim where it suffered detrimental treatment because of a protected characteristic of an individual, with whom the company is associated.
Mr Abrams was a member of a limited liability partnership, EAD Solicitors LLP (“EAD”). He subsequently set up a limited company (of which he was sole director and shareholder) to replace him as an individual member of EAD. There was no requirement that the services should be provided by Mr Abrams personally. When Mr Abrams reached the age of 62 (being the age at which Mr Abrams would have been obliged to retire as an individual member of EAD), EAD terminated the arrangement with the limited company. A claim was issued by both Mr Abrams and his limited company, on the basis that the company had suffered a detriment due to Mr Abrams age.
It was held by the EAT that the limited company could be discriminated against on this basis. The EAT explained that there was nothing in the Equality Act 2010 to indicate that the persons mistreated must be individuals. The EAT did comment that, following this decision, there were a number of scenarios in which companies could complain of discrimination. They specifically referred to examples of a company suffering a detriment due to it:
- Having a workforce made up of individuals of a particular ethnicity (although in practice is it unclear whether this would still apply if only a few individuals have these protected characteristics);
- Giving financial support to a particular political party; and
- Having an openly homosexual CEO (although it is not clear whether these type of claims could only apply if the employee involved is senior, such as in this example, or Mr Abrams’ case).
The potential implications of this case could be far reaching. The Equality Act covers employment, the provision of services, public functions and the disposal of property. In particular, any consultancy, provided by way of a service company, could now bring a discrimination claim against the client whom the individual consultant works. Individual consultants (who are required to perform the work personally) have always been protected by the Equality Act in any event, but this does widen the scope.
It remains to be seen how the Courts will deal with any such claims in the future, or whether this is likely to open the flood gates. There are many questions left unanswered by the EAT decision, in particular how a company can claim for injury to feelings (one of the main aspects of compensation awarded in discrimination cases). However, there is still scope for a company to claim for losses due to damaged reputation.