Limited companies can now bring discrimination claims

15 October, 2015
by: Cripps Pemberton Greenish

A decision made by the Employment Appeal Tribunal (EAT) in the case of EAD Solicitors LLP and others v. Abrams has determined that a limited company can bring a discrimination claim.

As part of his retirement plans and for tax reasons, Mr Abrams, a member of EAD Solicitors LLP, set up a limited company as a sole director. He resigned from the Limited Liability Partnership’s (LLP) membership and his company became a member, receiving his profit share whilst providing services to the LLP. When he reached retirement age, the LLP no longer wanted the company to be a member and wanted Mr Abrams to stop supplying his services. Mr Abrams brought an age discrimination claim under the Equality Act 2010 (EqA) on behalf of himself and his company.

The LLP argued that the company could not benefit from the protection of the EqA because only individuals can have the protected characteristics. The EAT disagreed: “… 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.” It noted that, under the Interpretation Act 1978, a “person” could include a company. The EAT held that there is nothing in the EqA that would restrict the company from being a “person” for the purposes of bringing a discrimination claim.

This decision is an important development in employment law and could lead to more companies bringing discrimination claims in other areas such as commercial and property transactions. The EAT identified this and gave examples in its judgment such as “a company being shunned commercially because it is seen to employ a Jewish or ethnic workforce…”. This case is the first of its kind but unlikely to be the last.