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Case law: Court confirms limited companies can bring discrimination claims in some circumstances

A limited company which was a member of a Limited Liability Partnership (LLP) could bring an age discrimination claim when it was discriminated against by the LLP on grounds of its shareholder/director's age, the court has ruled.

Legal Alert

This update was published in Legal Alert - November 2015

Legal Alert is a monthly checklist from Atom Content Marketing highlighting new and pending laws, regulations, codes of practice and rulings that could have an impact on your business.

A 62-year old individual was a member of an LLP. He was approaching retirement and, for tax reasons, set up a private limited company which became a member of the LLP in his place.

As a member of the LLP, the limited company agreed to provide the LLP with certain services, and satisfied this requirement by providing the individual to work for it. The company received a sum equal to the individual's former share of the LLP's profits as recompense.

However, there was no legal obligation for the services to be provided through the individual – legally, the company could have provided anyone to carry them out. The individual was neither an employee nor a worker, with no contractual relationship with the LLP.

When the individual reached the age at which he would have been forced to retire had he remained a member of the LLP, the LLP said the limited company should also retire as a member of the LLP, as if it were an individual that had reached that age. The company claimed age discrimination.

The LLP argued that only an individual could bring an age discrimination claim (or, in fact, any other discrimination claim) because such claims are based on 'protected characteristics' – for example, race, gender, disability, religion, etc - and only an individual can have a protected characteristic.

The court disagreed: a corporation can bring a discrimination claim if it suffers a detriment because it is associated with an individual with a protected characteristic, ie the discrimination is linked to an individual's protected characteristic. It is not necessary that the person with the protected characteristic is the same person who suffers the detriment.

Operative date

  • Now

Recommendations

  • A limited company may bring a discrimination claim where it is discriminated against because it is associated with an individual with a protected characteristic, even if that individual has not suffered the detriment.

Case ref: EAD Solicitors LLP & 7 Ors v Abrams [2015] UKEAT 0054_15_0506

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