Lisboa v Realpubs Ltd & Ors

A legitimate commercial policy to broaden a venue’s clientele does not justify discriminatory implementation. The tribunal must assess the overall factual matrix and ask whether the measures adopted treated customers less favourably on grounds of sexual orientation. A policy requiring an employee to participate in such discrimination may itself constitute discrimination against the employee. Where unlawful discrimination contributes to an employee’s decision to resign, it may amount to a repudiatory breach supporting constructive dismissal. The appeal was allowed and the discrimination and wrongful-dismissal claims were remitted for reconsideration of remedy.

The claimant, an openly gay assistant manager, resigned shortly after the respondent acquired and relaunched a formerly gay pub as a gastropub intended to attract a wider clientele. The Employment Tribunal upheld a conventional direct-discrimination complaint based on remarks made to the claimant, but rejected his complaint that he had been required to work within a policy making the pub less welcoming to gay customers. It also rejected his constructive wrongful-dismissal claim, holding that his resignation resulted from a mistaken perception of a homophobic policy.

The central issue on appeal was whether the Tribunal had focused too narrowly on the respondent’s legitimate commercial aim instead of the discriminatory effect of the policy’s implementation.

1. Appeal allowed. The Employment Tribunal’s dismissal of the Wethersfield v Sargent discrimination claim and the wrongful-dismissal claim was reversed. Remedy was remitted to a fresh Employment Tribunal.
2. A strategy of repositioning a formerly gay pub so that it appealed to all sections of the public was, without more, lawful. That did not answer whether the strategy had been implemented in a discriminatory way.
3. The Tribunal erred by stopping its enquiry once it had found the commercial strategy lawful. It should have considered the factual matrix as a whole and asked whether the measures adopted treated the established gay clientele less favourably than the desired straight or family clientele on grounds of sexual orientation.
4. Applying the principles in Showboat Entertainment Centre Ltd v Owens [1984] IRLR 7 and Wethersfield v Sargent [1999] IRLR 94, the findings concerning disparaging remarks, the proposed sign, the presentation of predominantly straight or family customers, and changes to the predominantly male staff plainly established less favourable treatment of gay customers.
5. Because that discrimination was not a mistaken perception, the claimant’s resignation was prompted by unlawful discrimination and accepted a repudiatory breach. Independently, the conventional discrimination found by the Tribunal was sufficient if it was a contributory factor in the resignation: Notts CC v Meikle [2004] IRLR 702 and Abbycars (West Horndon) Ltd v Ford UKEAT/0472/07/DA.
6. The £4,500 injury-to-feelings award was set aside. Compensation for wrongful dismissal and unlawful sexual-orientation discrimination, including injury to feelings, required reconsideration.

• Employment Appeal Tribunal: allowed the appeal against the Employment Tribunal’s judgment promulgated on 9 February 2010, reversed the dismissal of the Wethersfield v Sargent and wrongful-dismissal claims, and remitted remedy to a fresh Employment Tribunal.
• Employment Tribunal: upheld the conventional direct-discrimination complaint but dismissed the customer-policy discrimination and constructive wrongful-dismissal claims.