Philip Parr v MSR Partners LL (formerly Moore Stephens LLP)

The Court of Appeal held that the claimant's change of status from equity partner to ordinary partner (the "de-equitisation"), effected under a one‑off agreement, was a single act with continuing consequences rather than "conduct extending over a period" for the purposes of section 123(3)(a) of the Equality Act 2010. The court distinguished between an absolute or invariably applied discriminatory rule or scheme and the one‑off exercise of a discretion under the partnership Members' Agreement (clauses 29.2 and 29.4). Because the Members' Agreement contained an express discretion to extend equity status, and the respondent partnership had exercised that discretion in the claimant's particular case, the discriminatory act (if any) occurred when the claimant ceased to be an equity partner and not thereafter. The appeal was dismissed and the claim was remitted to the Employment Tribunal to consider, if practicable, whether to extend time on the just and equitable ground.

The appellant, born in 1958, had been an equity partner in a firm that converted to an LLP. Clause 29 of the Members' Agreement provided for a normal retirement date at 60 but also for a discretion to extend membership. The managing partner recommended and the Partnership Committee agreed that the appellant would become a non‑equity partner beyond his Normal Retirement Date. A De‑Equitisation Agreement dated 13 October 2017 recorded that change, which took effect on 30 April 2018. The appellant brought an employment tribunal claim in January 2019 alleging direct age discrimination, arguing that the retirement clause and the subsequent status change were part of continuing discriminatory conduct.

Procedural history: At a preliminary hearing the Employment Tribunal (EJ Elliott) found the Members' Agreement rule amounted to conduct extending over a period under s 123(3)(a) so the claim was in time. The respondents appealed to the Employment Appeal Tribunal (Mathew Gullick QC), which held (24 June 2021) that there was no conduct extending over a period beyond 30 April 2018 and allowed the appeal, remitting the case to the ET to consider an extension of time. Permission to appeal to the Court of Appeal was granted.

Nature of the claim/application: An age discrimination claim under the Equality Act arising from the claimant's loss of equity status and associated financial consequences following the de‑equitisation.

Issues framed by the court: (i) whether the claimant's grievance amounted to "conduct extending over a period" under s 123(3)(a) of the Equality Act 2010 such that time ran from the end of that period; (ii) if not, whether the Employment Tribunal should extend time on the "just and equitable" basis.

Reasoning: The court analysed authority distinguishing one‑off discriminatory acts from continuing discriminatory rules or schemes (Amies; Calder; Kapur; Sougrin; Tyagi and others). It concluded that where an employer's or partnership's rule operates as an absolute bar or is invariably applied it may constitute continuing conduct, but where the relevant provision operates by exercise of a discretion in individual cases (and was so exercised here), the act complained of was the one‑off change of status. Clause 29.4's discretion and the contemporaneous evidence that other equity partners had received different treatment meant clause 29.2 did not operate as an inevitable rule "in action" against the appellant after de‑equitisation. Accordingly the appeal was dismissed and the matter remitted for consideration of a time extension by the ET.

The appeal was dismissed. The Court of Appeal agreed with the Employment Appeal Tribunal that the claimant's de‑equitisation was a one‑off act (a demotion) rather than conduct extending over a period under section 123(3)(a) Equality Act 2010. The presence of an express discretion in clause 29.4 meant the retirement provision did not operate as a continuing rule in action against the claimant after 30 April 2018. The claim was therefore out of time and the case was remitted to the Employment Tribunal to consider whether to extend time on just and equitable grounds.

Employment Tribunal (Preliminary Hearing before EJ Elliott, 11–12 September 2019): found continuing conduct under s 123(3)(a) and claim in time. Employment Appeal Tribunal (Mathew Gullick QC) UKEAT/0238/20/00, decision 24 June 2021: allowed respondents' appeal, set aside ET finding and remitted the claim to the ET to consider extension of time. Court of Appeal [2022] EWCA Civ 24: appeal dismissed 14 January 2022.