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Discrimination claims must usually be brought in the employment tribunal within three months of any discriminatory act occurring. If the act is one in a series of discriminatory acts, a claim should be brought within three months of the last act in that series. In some discrimination claims, much hangs on whether there is such a ‘continuing act’ which links historical acts to the most recent and brings them within the time limit for tribunal scrutiny. That continuing act argument has been used in cases where the employer has applied a discriminatory policy or rule, where the application of that policy or rule extends over a period of time. This might be the case if there is a policy where discretion is exercised, for example in deciding to promote a man rather than a woman, where time will run from the date of the decision/exercise of that discretion. The ongoing loss of pay is a consequence of the discrimination, rather than a continuation of the discrimination itself.  The Court of Appeal in Parr v Moore Stephens LLP has considered a case recently which relied on the continuing act argument to bring a claim within time.

The employee had been an equity partner with an accountancy firm since 1995. When the firm became a limited liability partnership in 2005, he became an LLP member. The LLP members’ agreement contained a clause (clause 29) which required all partners to have a normal retirement age of 60. The firm retained the discretion to extend employment beyond that age subject to business need. The employee wanted to stay on beyond his normal retirement date, as other partners had done previously. An agreement was reached for him to stay on for two years but only as an ordinary non-equity partner. This meant he would no longer have a financial stake in the business and would be a salaried employee. The ‘de-equitisation’ agreement was reached in April 2018. In September 2018, the employee heard of plans to sell the business. Thinking he was around £3 million out of pocket as a result of his de-equitisation agreement, he sought to bring a direct age discrimination claim. However his claim would be out of time unless he could show that his employer’s actions were a continuing act rather than a one-off event which took place in April 2018.

The employment tribunal allowed his claim to go forward, saying that clause 29 was the continuing application of a discriminatory rule. The EAT disagreed and said that any losses came from the one-off decision brought about by the de-equitisation agreement. Any claim should have been brought within 3 months of April 2018. The Court of Appeal agreed. The de-equitisation agreement was essentially a demotion. If his employment had ended in April 2018, the time limit for any claim would have run from then. The same was true for a demotion. This was a one-off act with continuing consequences, rather than a continuing act of discrimination. The employee had argued that a discriminatory act concerning a change in status is a one-off act unless it arises from the application of a discriminatory rule or policy. Policy reasons were also at play in not accepting this argument. Such a finding would encourage businesses to stick to default retirement ages ruthlessly if continuing the relationship exposed the business to a discrimination claim as long as the relationship continued.

It is sometimes difficult to distinguish between a continuing act of discrimination and a one-off act of discrimination with ongoing consequences. Here, the employer could demonstrate that it had a genuine discretion to extend an equity partnership beyond the partner’s normal retirement date and there were examples of this happening previously. That meant they were able to show that there was no blanket discriminatory policy which applied to all LLP members. There was no act extending over a period of time in relation to the individual in this case, even though the rule remained in place for LLP members after the date of the employee’s effective demotion. This case shows that the difference between the two is vitally important for employers in order to ensure that claims which are brought outside the employment tribunal time limits are not allowed to proceed, as in this case.

Find out how we can help.  Our partner, Jon Dunkley, heads the Wollens specialist Employment Department.  Contact him today for an informal chat, without obligation on 01271 342268 or via email at [email protected].