United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR RICHARD LEIPER (of Counsel) Instructed by: British Medical Association Legal Services BMA House Tavistock Square London WC1H 9LP
For the Respondent	MS NAOMI ELLENBOGEN (of Counsel) Instructed by: Messrs Addleshaw Booth & Co Solicitors 25 Cannon Street London EC4M 5TB


 


HIS HONOUR JUDGE J McMULLEN QC

1. This case deals with the entitlement of one partner in a two-partner firm to sue the other for sex discrimination. The judgment represents the views of all three members. We will refer to the parties as Applicant and Respondent.

Introduction

2. This is an appeal by the Applicant in those proceedings against the decision on a preliminary point of an Employment Tribunal sitting at London (Central), Chairman Ms N Walker, registered with Extended Reasons on 25 July 2002. The Applicant was represented by a representative of the BMA and today by Mr Richard Leiper of Counsel. The Respondent was represented there and here by Ms Naomi Ellenbogen of Counsel.
3. The Applicant claimed sex discrimination by the termination of the relationship between the parties on the grounds of her pregnancy. The Respondent accepted the relationship ended on notice and asserted other reasons for its termination than sex discrimination.

The Issue

4. The essential issue, as defined at a directions hearing of the Employment Tribunal was to decide whether it had jurisdiction to hear the case. We stress the merits of this case have not been tried.
5. The Tribunal decided that it lacked jurisdiction and dismissed the complaint. The Applicant appeals against that finding.
6. Directions were given sending this appeal to a full hearing by Judge Altman and members, sitting at a Preliminary Hearing on 5 December 2002.

The Legislation

7. The relevant provisions of the legislation are as follows. The Sex Discrimination Act 1975, section 1 (2) (a), which came into effect on 11 October 2001 and regulates this case provides:

1 (2) "In any circumstances relevant for the purposes of a provision to which this subsection applies, a person discriminates against a woman if:

(a) on the ground of her sex, he treats her less favourably than he treats or would treat a man."

The right to bring proceedings is given by section 63 (1) (a):

63 (1) "A complaint by any person ("the complainant") that another person ("the respondent"): -

(a) has committed an act of discrimination against the complainant which is unlawful by virtue of Part II

may be presented to an Employment Tribunal."."

Firms are dealt with in sections 11 (1) (d) (ii) and 82:

11 (1) "It is unlawful for a firm, in relation to a position as partner in the firm, to discriminate against a woman…

(d) in a case where the woman already holds that position…

(ii) by expelling her from that position, or subjecting her to any other detriment"

82 (1) "firm" has the meaning given by section 4 of the Partnership Act 1890

82 (1A) "References in this Act to … to the expulsion of a person from a position as partner include references: -

(a) to the termination of that person's … partnership by the expiration of any period (including a period expiring by reference to an event or circumstance) …; and

(b) to the termination of that person's … partnership by any act of his (including the giving of notice) in circumstances such that he is entitled to terminate it without notice by reason of the conduct of the … other partners."

Principals and agents appear in section 41 (2)

41 (2) "Anything done by a person as agent for another person with the authority (whether express or implied, and whether precedent or subsequent) of that other person shall be treated for the purposes of this Act as done by that other person as well as by him."

8. The reference to the Partnership Act 1890 leads to the following relevant sections: -

1 (1) "Partnership is the relation which subsists between persons carrying on a business in common with a view of profit.

4 (1) Persons who have entered into partnership with one another are for the purposes of this Act called collectively a firm, and the name under which their business is carried on is called the firm-name.

5 Every partner is an agent of the firm and his other partners for the purpose of the business of the partnership; and the acts of every partner who does any act for carrying on in the usual way business of the kind carried on by the firm of which he is a member, bind the firm and his partners, unless the partner so acting has in fact no authority to act for the firm in the particular manner, and the person with whom he is dealing either knows that he has no authority, or does not know or believe him to be a partner.

25 No majority of the partners can expel any partner unless a power to do so has been conferred by express agreement between the partners.

26 (1) Where no fixed term has been agreed upon for the duration of the partnership, any partner may determine that partnership at any time on giving notice of his intention so to do to all the other partners.

(2) Where the partnership has originally been constituted by deed, a notice in writing signed by the partner giving it, shall be sufficient for this purpose.

32 Subject to any agreement between the partners, a partnership is dissolved…

(c) If entered into for an undefined time, by the partner giving notice to the other or others of his intention to dissolve the partnership.

In the last mentioned case the partnership is dissolved as from the date mentioned in the notice as the date of dissolution, or, if no date is so mentioned, as from the date of the communication of the notice."

9. The Partnership Act 1890 is divided into tranches. Mr Leiper points out that section 5 is contained within a tranche entitled "Relations of Partners to Persons Dealing with them"; it is followed by a separately-headed tranche, beginning at section 19, headed "Relations of Partners to One Another"; and dissolution beginning at section 32 is dealt with in a tranche headed "Dissolution of Partnership, and its consequences".

The Parties

10. The facts in this case are tentatively stated as there has been no substantive hearing. The Respondent is a general medical practitioner in West London. She employed at least one other person. In addition the Applicant was employed as a locum general practitioner over much of the period from October 2000 to 31 March 2001.
11. On 1 March 2001 the two signed a partnership declaration for the purposes of the local health authority. On 3 March the Applicant discovered she was pregnant and told the Respondent so on 5 March. The two agreed to form a partnership from 1 April 2001 following some negotiations. They were thus partners until the relationship ended by a notice of dissolution, given by the Respondent, on 25 August to take effect on 30 September 2001.
12. The Tribunal decided that the Applicant was not entitled to bring proceedings against the Respondent as the Respondent is not a firm. It held that the Sex Discrimination Act 1975 cannot be used by one individual against another. It also held that a dissolution of the partnership can be an expulsion or other detriment.

The Applicant's Case

13. The Applicant submitted that the Employment Tribunal had erred in law in that dissolution must be an act which can be actuated by sex discrimination and therefore justiciable. There can also be constructive explusion. It was also contended that the act of one partner to dissolve the partnership must be done by that one partner as agent with the authority of the other; that the Applicant could sue as an individual, Dr Robinska, for the wrong of sex discrimination. It was contended that the law allows for an action to be taken in respect of such dissolution or expulsion. Since the mechanism is not found in the Partnership Act, it must be found in the Sex Discrimination Act, thus the Applicant ought to be entitled to sue the tortfeasor or the remaining partner (viz Dr Robinska in this case).

The Respondent's Case

14. On behalf of the Respondent it is contended that the Respondent is not a firm and therefore she may not be sued under section 11. The Applicant is not entitled to argue her case under section 41 (2) since it had not been argued below; but there is no objection to it being argued, not as a free-standing right, but as an aid to the construction of the two statutes in play here. It is contended that the act forming the basis of the claim was done by Dr Robinska alone and that the 1975 Act allows proceedings to be weighed against the firm and not her.
15. In the course of argument Ms Ellenbogen accepted the illustration which we gave of a ten-partner firm which commits an act of sex discrimination. Proceedings against the firm would be brought against the nine wrong-doing partners with the victim herself not included amongst the defendants. There is, Ms Ellenbogen submits, a distinction, however, when the partnership numbers are reduced, as here, to two.

Conclusions

16. It is necessary for us to consider the correct approach to the construction of these two statutes. It will be noted that the Act outlaws discrimination in a variety of different contexts. Employment is the obvious one, but so are variants of it such as discrimination against contract workers (section 9), discrimination by trade unions (section 12) and qualifying bodies (section 13), persons concerned with vocational training (section 14) and employment agencies. There are also special cases dealing with police officers, prison officers, ministers of religion and barristers.
17. The wrong perceived by society of sex discrimination is to be challenged wherever it occurs. In the field of employment relationships, the wrongdoing is identified initially in the Equal Treatment Directive 76/207/EEC, but, as is conceded by Mr Leiper, that does not apply in terms to a partnership, nor does the Pregnant Workers Directive 92/85/EEC. Neither is argued as an aid to purposive construction of the 1975 Act as amended.
18. However, in the field of race relations, which does not yet have an operative EU Treaty base, it has been held that the "very great evil" of racial discrimination is one which requires a broad interpretation to be given to legislation protecting those who are victims (see Savjani v The IRC [1981] QB 458 at 466 and 467, and Jones v Tower Boot Co Ltd [1997] ICR 262 CA, per Waite LJ).
19. Since both the Sex Discrimination Act 1975 and Race Relations Act 1976 contain very similar, if not identical, provisions in their respective fields, it is right to attempt to construe them in parallel (see Rhys-Harper v Relaxion [2001] ICR 1176 CA, judgment pending in the House of Lords). Thus we take it that we should give a broad interpretation to the statute in our attempt to apply the policy of this anti-discrimination measure.
20. Section 11 has been the subject of an amendment by the Sex Discrimination Act 1986, sections 1(3), 9(2) and its Schedule Pt II so that, where originally partnerships were included only if they had six or more partners, that reservation was removed. That amendment was made at the same time as an amendment to remove the exclusion by section 6(3) of the Act of undertakings where less than six persons are employed. The latter was driven by the judgment of the ECJ in EC Commission v UK [1984] ICR 192, but not the former. It appears to have been enacted at a time when barriers to complaints of sex discrimination were being dismantled. Interestingly, no parallel amendment was made to the Race Relations Act 1976 section 10, so discrimination on racial grounds is not unlawful in firms of less than six partners. Since it is clear that a partnership may consist of two persons, Parliament must have turned its mind to any difficulty which might occur in a two-partner firm where one is alleging sex discrimination by the other. It would have been easy for Parliament to have replaced the figure of six with three, so as to deal with what is an obvious problem; but it did not. We must therefore assume that partnerships of whatever size, be they of only two partners, are caught by section 11.
21. It is also clear from the Partnership Act 1890 that Mr Leiper's submission about the organisation of that Act is correct. As is put in Statutory Interpretation: A Code Bennion 4^th Ed section 255 page 636, citing authorities, "most modern judges consider it not only their right but their duty to take account of headings in Acts." We hold that section 5, relied on by Ms Ellenbogen and by the Employment Tribunal, is correctly positioned within the part of the statute regulating the relations between the firm and third parties (see, for example, the express reference in section 11). Thus the answer to the point cannot be found in section 5. Can it be found in the sections regulating the relationship between the partners themselves?
22. In our judgment, the relationship between the Partnership Act 1890 and the Sex Discrimination Act 1975 goes little further than the definition of a firm and the treatment of expulsion. It is clear that a single partner in a partnership at will, such as that in the present case, may give notice and terminate the partnership as from the date cited in the instrument bringing it to an end. It might be said that that act is done pursuant to an agreement of the firm. It is the one case in which every single partner acting individually has the right to bind the partnership by taking the step to bring the partnership to an end. It might be described as some general aspect of the constitution binding them together so that effect is given by law to the act of a single partner in terminating the relationship, for good reason or bad, or for none at all. The question is, is that Act immune from the reach of the Sex Discrimination Act 1975?
23. The Sex Discrimination Act allows for proceedings to be brought following what might be described as the constructive expulsion from a partnership (see section 81 (1) (a)); and the introduction of partnerships into the Act by section 11 certainly gives the right to a single partner to bring proceedings. The issue in the present case is: against whom? It is accepted on behalf of the Respondent that in legal proceedings a firm does not remain distinct from its individual members; at least in England and Wales and Northern Ireland. Thus, an action against a firm is properly constituted if it is brought by a partner against named partners.
24. It seems to be common ground, since Mr Leiper did not resist, that an action in this example would be brought against all partners other than the victim. Take for example the case of a ten-partner firm which decides to commit an unlawful act by a majority of seven to three. Proceedings would be brought by the victim against all nine; that is, the majority and the dissentients; but not, it will be noted, against all ten, since the claimant would also be suing herself as defendant.
25. With that analysis in mind, we see no difference between an action constituted as against the sole remaining member of the firm where the firm consists of two persons. The Applicant would leave herself out of the pleadings as a defendant or a Respondent. She is left to sue the person who committed the wrong and who is the other half of the partnership.
26. Although the Applicant's pleadings in this case are constituted against Dr Robinska, it is entirely accurate to describe her as the firm for this purpose. The Applicant would otherwise be left with no remedy. In our view, it cannot be right, in the example of a ten-partner firm, for her to have the right to complain, but not where the partnership is constituted of two partners. The policy of this part of the Act is to prevent sex discrimination by partners directed against one of themselves. The Act's original policy was to exclude small firms from this regime. With the removal of that limitation, there is no policy reason to exclude the smallest firms. Thus we hold that the provisions of the Sex Discrimination Act 1975 do apply to a two-partner firm, so that proceedings may be brought by the Applicant against the sole remaining partner, in that partner's own name.
27. It is also possible to reach the same solution by a different route. The act complained of here took place on 30 September 2002. On that date there no longer was a partnership; it had been dissolved. The person responsible for the dissolution, and on this footing the tortfeasor, was the Respondent; and at the time proceedings were launched she was, in effect, the sole person against whom they could be brought. In order to give effect to the anti-discrimination regime of the Sex Discrimination Act 1975, she is the only person against whom the proceedings could realistically be brought and in respect of whom a remedy on behalf of the Applicant could be sought.
28. Although not strictly necessary for our decision, we were asked to consider section 41 (2); and again an alternative approach to reach the same solution reveals itself. Here it could be said that the dissolution of the partnership is pursuant to the original agreement of the partners that it could be done by any one of them at any time and thus section 41 (2) might constitute Dr Robinska as the principal. We prefer, however, to say nothing more about that argument since it was resisted as a matter of principle by Ms Ellenbogen as a free-standing right, pursuant to the doctrine against new points on appeal in Kumchyk v Derby County Council [1978] ICR 116 (EAT).

Disposal

29. The appeal is allowed. We will give permission to appeal because this is a difficult point. It appears to be entirely novel and raises an issue which is of importance in partnerships. No application has been made for a stay and therefore this case will go back to the same Tribunal, or to a differently-constituted Tribunal at the discretion of the Regional Chairman, for a hearing on the merits.