Companies can be discriminated against

In the recent case of EAD Solicitors LLP and others v Abrams, the Employment Appeal Tribunal has held that it is possible for a limited company to bring a claim of direct discrimination on the ground of age under section 13 of the Equality Act 2010.

Like many of the cases on age discrimination, the claim was against a firm of solicitors who sought to compulsorily retire a partner when he reached the retirement age in their Partnership Deed (nowadays an LLP Membership Agreement).  The twist here was that the partners were (for tax reasons) supplying their services to the firm (which was a Limited Liability Partnership) through personal service companies.  The member of the LLP that brought the claim of age discrimination was therefore the individual partner's personal service company, rather than the partner himself.

So how can you discriminate against a company on grounds of age?  The company itself was actually very young, having been incorporated only as the partner approached retirement, but it was allegedly being discriminated against on grounds of old age.

The answer is that the formulation of the test for direct discrimination in section 13 is:

"A person (A) discriminates against another (B) if, because of a protected characteristic, A treats B less favourably than A treats or would treat others."

The discrimination therefore just has to be "because of a protected characteristic" (in this case age).  Person B does not himself (or itself) have to have that characteristic.  This is what is known as "associative discrimination", where person B is discriminated against because he (or it) is associated with someone having the protected characteristic.  This is a well-established principle, which has been applied for example in cases where someone is dismissed from their job because they are caring for a disabled person or where they are disciplined for refusing to obey instructions to discriminate against customers on racist grounds.  The point which was decided in this case was that "person B" does not have to be a natural person, but can be a legal person such as a company.

Other forms of discrimination against companies are therefore possible.  The judge gave hypothetical examples of "a company being shunned commercially because it is seen to employ a Jewish or ethnic workforce; a company that loses a contract or suffers a detriment because of pursing an avowedly Roman Catholic ethic; one that suffered treatment because of its financial support for the Conservative Party or, say, for Islamic education; or one that was deliberately not favoured because it offered employment opportunities to those who had specific disabilities that were unattractive to some would-be contractors or because, let us suppose, of the openly gay stance of a chief executive."

The case only decided the claim could proceed as a preliminary point.  Whether this company was actually discriminated against, or whether the discrimination could be justified as a proportionate means of achieving a legitimate end (the usual way to retire older partners) remains to be decided.  It will also be interesting to see what damages can be claimed.  The company has clearly suffered loss of profits, but can it claim for injury to the feelings of its director?