The Equality Act states that it is direct discrimination to treat a person less favourably “because of a protected characteristic”, but what if the claimant is a limited company? In EAD Solicitors LLP and seven ors v Abrams, the Employment Appeal Tribunal (EAT) held that although the reference to a protected characteristic in the Act is to the protected characteristic of the person suffering the detriment, it can extend to limited companies.
Mr Abrams, a member of a limited liability partnership (LLP), was due to retire at 62. Shortly before his retirement date he set up a limited company for tax purposes which took his place as a member of the LLP. Section 4 of the Limited Liability Partnership Act 2000 states that a corporate body can be a member of an LLP.
The company was entitled to receive Mr Abrams’ profit share had he continued as a member and it agreed to supply the services of an appropriate fee earner to the LLP. As such, Mr Abrams was not an employee serving under a contract of employment nor a worker, nor did he have any continuing contractual relationship with the LLP.
When Mr Abrams reached retirement age, the LLP objected to the limited company continuing as a member. He then brought a claim of age discrimination naming himself as the first claimant and the company as the second. The LLP argued that only an individual can have a protected characteristic, in this case the characteristic of age.
The tribunal decided that a corporate body can claim to have suffered detriment because of the protected characteristic of an individual who happened to be its principal shareholder and member.
And the EAT agreed. It held that the Equality Act does not deal with individuals on the basis of their protected characteristics but instead identifies discrimination as detrimental treatment caused by the protected characteristic or something related to it. Detrimental treatment can therefore be meted out to any person, whether “natural or legal”.
On that basis it held that there was no reason to “restrict the class of those who can suffer a detriment if what is being complained of … is a detriment being suffered because of an individual’s protected characteristic”.
It rejected the argument that the wording of the Equality Act was such that the person who is discriminated against has to be an individual. The Act states that the treatment has to be detrimental “because of a protected characteristic” but not specifically the protected characteristic of the person suffering the detriment.
The protected characteristic may therefore be that of an individual who is not the claimant, and the claimant suffering the detriment need not be capable of having a protected characteristic.