Case update (1): “Knowing me, Knowing you” – discrimination by association

redundancy1-250What do we already know?

We updated you in our August 2015 Newsletter Case update (2): Indirect discrimination – wider implications that the CJEU decided in the case of CHEZ Razpredelenie Bulgaria AD v Komisia za zashtita ot diskriminatsia that the concept of indirect discrimination (as set out in EU law) permits claims to be brought by individuals who are not actually part of the protected group disadvantaged by a policy, if they “suffer alongside” that group.

What’s new?

On the same theme of associative discrimination, we now have two EAT decision which broaden the scope yet further. Although the full extent of associative discrimination is not yet fully clear (in particular the case of Thompson v London Central Bus Company Ltd has been remitted to the Tribunal), employers should in the meantime be alert to the widening breadth of discrimination law and tread carefully when it comes to making decisions about employees which could be related to some element of less favourable treatment, including the protected characteristics or acts of others.

1. EAD Solicitors LLP and others v Abrams

Summary: Can a limited company that is a member of a limited liability partnership (LLP) bring a claim against the LLP alleging it is the victim of direct discrimination?

Yes says the EAT in the above case available here.

Facts: The claimant was a solicitor and member of an LLP nearing retirement. He set up a limited company of which he was the sole director. The idea was that the limited company took his place as a member of the LLP, receiving the profit share he would have taken had he continued as a member, with the company supplying his services as a fee-earner to the LLP.

When the LLP objected to the claimant offering services after the time at which he would normally have retired, the claimant brought a Tribunal claim against the LLP. The issue was raised as to whether the company could bring a claim of age discrimination against the LLP, on the basis that it had suffered detrimental treatment because of the protected characteristic of someone with whom it was associated (the claimant). The Tribunal decided it could.

The EAT upheld the Tribunal’s decision that the company could bring a claim of age discrimination against the LLP.

The EAT held that the Equality Act 2010 does not deal with individuals on the basis of their own protected characteristics but rather identifies discrimination as being detrimental treatment caused by a protected characteristic or related to it. Such detrimental treatment can be given to any person, whether natural or legal, and provided the discrimination complained of is linked to the protected characteristic of an individual, a claim can be brought. Therefore, it was held that there is nothing to prevent a corporation from bringing a discrimination claim.

Implications: This is an important decision for employers because it establishes that a corporate body can claim discrimination where it suffers detrimental treatment because of the protected characteristic of someone with whom it is associated. Employers should be particularly alert to this when they engage the services of an individual through a limited company and, for example, make sure that any business decision they make in relation to another company, such as whether or not to continue to use its services, is not influenced by the protected characteristic of someone with whom the company is associated.

The EAT also gave some interesting illustrations of how the decision could be extended, for example, to commercial and property transactions:

  • A company being shunned commercially because it is seen to employ a Jewish or ethnic workforce; or
  • A company losing a contract because of the openly gay stance of a chief executive.

Employers should therefore take care not to discriminate because of a protected characteristic when selecting or determining arrangements with their contractors.

2. Thompson v London Central Bus Company Ltd

Summary: Can a claim of victimisation be based on discrimination by association?

Yes, says the EAT in the above case, available here.

Facts: Mr Thompson was a bus driver for London Central Bus Company Ltd. He was dismissed following an incident in which he gave his high visibility vest to another employee. He claimed unfair dismissal, notice pay and victimisation. He also raised an internal appeal. On appeal, his dismissal was overturned and a 21-day unpaid suspension and final written warning were substituted. Only his victimisation claim remained.

The victimisation claim was not based on a protected act by Mr Thompson, but on the protected acts of others. Mr Thompson claimed that he had told management that he had overheard a conversation in which it was suggested that the employer had targeted certain employees who had asserted that management were in breach of the Equality Act 2010. Shortly afterwards, disciplinary action had been initiated against him.

Mr Thompson claimed that he was “associated” in the mind of the employer with the protected acts of others and that was what led the employer to start disciplinary action against him. Mr Thompson was also “associated” with those who had performed the protected acts by reason of the fact that they were members of the same trade union.

A preliminary Tribunal hearing was held and the Tribunal found that Mr Thompson could rely on the protected acts of others in order to bring a victimisation claim. However, the Tribunal decided the link or association between Mr Thompson and the individuals who performed the protected acts was so tenuous that Mr Thompson was not entitled to protection under the Equality Act 2010. In addition, the Tribunal also expressed doubts as to whether membership of the same trade union could give rise to the association necessary for the purposes of the Equality Act.

Mr Thompson appealed. The EAT held that the Tribunal was not entitled to reach the conclusions it did. The correct test is whether the employee was subjected to a detriment by reason of a third party’s protected act: the issue is not whether there is a relationship between the victim and the third party but whether, in the mind of the employer, the protected act of a third party was the reason for the treatment of the employee. Any link between a claimant and the third party could exist solely in the mind of the employer. In this case, there was no reason for the Tribunal to conclude that membership of a trade union by both Mr Thompson and those individuals performing the protected act was an insufficient basis for a successful claim. The EAT considered that it was “entirely possible to conceive of a situation where an employee’s membership of an organisation, which had protested about protected acts, might cause an employer to treat the employee in a detrimental way”. i.e. the Equality Act 2010 should be read as allowing claims based on the acts of third parties.

Implications: This is the first EAT case where discrimination by association has been found to apply to victimisation – previously claims based on association were understood to be limited to direct discrimination and harassment. As the claim has been remitted to the Tribunal we await its decision, so watch this space… However, if the conclusion to date is correct, i.e. that the Equality Act 2010 must be read as allowing victimisation claims based on the acts of third parties, this would represent a significant shift in the law.

What this decision does make clear is that the issue is not whether there is a relationship between the victim and the third party or how close that relationship is. (However, the more tenuous the association between the person with the protected characteristic and the person bringing the claim, the harder it will generally be to prove that the protected characteristic was the reason for the discrimination).