Court of Appeal considers whether alleged age discrimination was a one-off act

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In Parr v MSR Partners LLP (formerly Moore Stephens LLP), the Court of Appeal considered whether alleged age discrimination was a one-off act or conduct which extended over a period of time

Philip Parr worked for a firm of accountants. He was an equity partner from 1995 and when the firm changed to a Limited Liability Partnership (“LLP”) in 2005, he became a member of the LLP. The LLP’s membership agreement (“Agreement”) provided a normal retirement age of 60, subject to the firm’s Managing Partner agreeing otherwise if there was a business need.

Mr Parr was due to retire under the terms of the Agreement on 30 April 2018, but did not wish to do so. Others had been permitted to stay on past their normal retirement date. It was agreed that Mr Parr could continue working for the firm for two further years, but as a non-equity partner. He was required to enter into a de-equitisation agreement, which changed his status from 30 April 2018.

On 13 September 2018, Mr Parr learned that the LLP was planning to sell parts of its business. Since Mr Parr was then a non-equity partner, he was not entitled to any sale proceeds. He brought an Employment Tribunal claim for age discrimination, arguing that he had lost almost £3,000,000 in sale proceeds.

A discrimination claim must be brought within three months (less one day) of the act complained about. If a discriminatory act extends over a period of time, it is treated as done at the end of that period. In this case, since the discriminatory act complained about was Mr Parr’s change in status to a non-equity partner, Mr Parr would have only been in time to bring his claim if the LLP’s actions were deemed to extend over a period of time, rather than a one-off act.

The Employment Tribunal found that the Agreement was a continuing discriminatory rule or policy, so allowed the claim to proceed. The firm appealed and the case went to the Employment Appeal Tribunal (“EAT”). The EAT set aside the Employment Tribunal’s judgment on the basis that the de-equitisation agreement made a one-off, fundamental and permanent change to the nature of the relationship between Mr Parr and the firm. It was a one-off “act which had continuing consequences, rather than conduct which extended over a period”.

Mr Parr appealed to the Court of Appeal, which dismissed his appeal. The Court held that the Agreement “could only be applied once to any individual”, after that it “disappeared into the rear view mirror”. Here, the Agreement was applied to Mr Parr on 30 April 2018, so his claims were brought out of time.

The case was sent back to the Employment Tribunal to determine whether it would be “just and equitable” to extend the time limit in this case.