In EAD Solicitors LLP and others v Abrams the EAT held that a limited company can 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.
Mr Abrams was a member of a limited liability partnership (LLP). As he approached retirement for tax reasons he set up a limited company of which he was the sole director. The company took his place in the LLP and he withdrew from membership. The limited company was entitled to receive the profit share Mr Abrams would have received as a member and it agreed to supply the services of an appropriate fee earner to the LLP; it was expected that this would be Mr Abrams but there was no obligation in this regard. Mr Abrams was therefore neither an employee or a worker and had no contractual relationship with the LLP.
When Mr Abrams reached the age at which it had been agreed he would retire had he remained a member of the LLP and the LLP objected to the limited company remaining a member of the LLP and supplying Mr Abrams’ services. Mr Abrams and the limited company brought an age discrimination claim and as a preliminary issue the tribunal had to consider whether the limited company could bring a claim under the Equality Act 2010. The tribunal held that it could and on appeal the EAT upheld this view.
The LLP sought to argue that as only an individual can have a protected characteristic, only an individual can bring a discrimination claim. The EAT rejected this argument, pointing out that the Equality Act does not deal with individuals on the basis of their protected characteristics but identifies discrimination as being detrimental treatment caused by the protected characteristic or related to it. Such detrimental treatment can be given to any person, whether natural or legal, and if it is because of a protected characteristic, it can form the basis of a discrimination claim. The person suffering the detriment need not be capable of having a protected characteristic. There is nothing in the wording of the Equality Act to prevent a corporation bringing a discrimination claim.
The EAT gave a number of examples of ways in which a corporation might suffer such detrimental treatment because of the protected characteristic of another individual, including a company being shunned commercially because it employs a Jewish or ethnic workforce, a company that loses a contract or suffers a detriment because of pursuing a Roman Catholic ethic, one that suffered treatment because of the openly gay stance of a chief executive. Most of these circumstances will arise in the field of the provision of goods and services rather than employment but it is clear that this decision opens up the potential for liability for discrimination in areas which may not previously have been considered. The case is believed to be the first discrimination case brought by a company and could lead to more corporate bodies bringing discrimination claims in the employment tribunal or in the civil courts for refusal to supply or purchase goods or services (or only doing so on disadvantageous terms) because of the age, ethnicity, gender, sexual orientation, religion or belief of the people who run the disadvantaged company.