The Equality Act is generally understood to protect individuals from less favourable treatment on grounds of a ‘protected characteristic’ (such as age, race or sex). But can a company benefit from the protection of discrimination law as well? The Employment Appeal Tribunal (EAT) recently considered this issue in a dispute between Mr Abrams and EAD Solicitors LLP.
Mr Abrams, a member of the LLP, decided for tax reasons to set up a limited company with himself as sole director. This company then replaced Mr Abrams as an LLP member. It was expected that, through his company, Mr Abrams would continue to provide services to the LLP much as before. However, Mr Abrams was no longer employed by the LLP and there was no obligation on him to perform services personally.
Once Mr Abrams reached the LLP’s retirement age of 62, the LLP objected to the company continuing to offer Mr Abrams’ services. It noted that were Mr Abrams’ an LLP member in his own right he would have retired at that time. Mr Abrams brought direct age discrimination claims on behalf of himself and his company. The LLP argued that as only individuals can have a protected characteristic, only individuals are protected from discrimination.
The EAT disagreed with the LLP and held that a limited company could bring a claim of direct discrimination. It explained that discrimination occurs where detrimental treatment is caused by or related to a person’s age or other protected characteristic. The development of associative discrimination claims shows that a person does not have to possess a certain characteristic themselves to bring a claim, and references to a ‘person’ in the Equality Act include a ‘legal person’ such as a limited company.
While the vast majority of discrimination claims will continue to be brought by individuals, employers who shun selected companies because they are seen to have certain religious or political connections, or they employ or engage workers from a particular ethnic background, will be putting themselves at risk. With no caps on awards for discrimination, and corporate bodies tending to have deeper pockets, employers should take care to ensure that their treatment of companies is not discriminatory.