What follows is an interesting case about an equity partner in a national accountancy practice, Moore.
Background
Where a discrimination complaint relates to a single act (for example, a one-off comment amounting to sexual harassment, or a discriminatory dismissal), it will usually be easy to identify the date of the act and therefore to calculate the time limit for presenting the claim to the tribunal. Sometimes, however, there will be a course of discriminatory conduct rather than an isolated incident. This is why section 123(3)(a) of the Equality Act 2010 (EqA 2010) stipulates that, where an act or acts of discrimination extend over a period (commonly referred to as a “continuing act”), they are treated as having occurred at the end of that period. Therefore, time does not start to run until the end of the course of discriminatory conduct.
In the case reported below, the Court of Appeal considered whether an LLP’s decision to demote an equity partner when he reached the contractual retirement age set out in the members’ agreement amounted to a one-off exercise of the LLP’s contractual discretion, or a continuing act.
The Case
The Court of Appeal has held that an accountancy firm’s decision to exercise a contractual right to de-equitise a partner when he reached the age of 60, and allow him to continue as a salaried partner, should be treated as a one-off change to the individual’s status, rather than an ongoing application of a discriminatory rule.
The court held that the relevant clause of the members’ agreement could only be applied once to any individual. After it was exercised, it was no longer “in action” against that individual. The specific act of which the partner complained was the act of de-equitisation, which amounted to a demotion. A dismissal, even if discriminatory, was a one-off act with continuing consequences rather than conduct extending over a period, even though the effects of the dismissal in terms of loss of pay and pension could endure for the rest of their life. There was no logical reason why a demotion should be treated differently, just because the parties remained in a contractual relationship.
The court rejected the partner’s submission that an act or omission concerned with a change of status, such as a failure to promote, should be treated as a one-off act unless the act or omission arises from a rule or policy (and that a mandatory retirement age, even with a discretion to extend, was such a rule or policy). This was not the correct interpretation of the authorities on continuing acts.
Accordingly, the partner’s age discrimination claim for losses of almost £3 million relating to the proceeds of sale of the firm, was out of time, unless time could be extended on the just and equitable ground. It could not be said that the firm’s treatment of the partner amounted to “conduct extending over a period” under section 123(3)(a) of the Equality Act 2010.
(Parr v MSR Partners LLP (formerly Moore Stephens LLP) [2022] EWCA Civ 24 (14 January 2022).)
Source: Practical Law
