Out-Law / Your Daily Need-To-Know

Directors of an organisation can be liable for discrimination as agents, tribunal finds

30 Sep 2011, 9:16 am

Directors of an organisation can be guilty of breaching discrimination laws when carrying out acts on behalf of that organisation, the Employment Appeals Tribunal (EAT) has said.

Mr Justice Silber upheld an earlier ruling that two directors of All Saints Haque Centre in Wolverhampton were liable for dismissing two employees on account of their Hindu faith, despite arguing that they were acting as directors and not as 'agents' of the centre.

The original tribunal was also correct to take into account the directors' "high handed" and "malicious" actions after the two employees were dismissed in calculating the amount of damages due, the judge said.

The board members were 'agents' of the centre for the purposes of discrimination laws because they were "acting within their authority" when managing the centre, Mr Justice Silber said in his ruling.

An agent is a person authorised to act on behalf of another, called the 'principal', to create a legal relationship with a third party. The test of 'authority' was whether in discriminating against the two employees the directors were "exercising authority conferred by [the centre] and not whether [the centre] had in fact authorised [them] to discriminate," the judge said.

The Employment Equality (Religion or Belief) Regulations state that "anything done by a person as agent for another...shall be treated as done by that other person as well as by him". This meant that the directors could be found personally liable as agents for the unfair dismissal, the judge said. Similar provisions are contained in the 2010 Equality Act.

The judge also upheld an earlier decision that the two directors were jointly and severally liable for the employees' dismissal. This meant that the employees could pursue the two individuals for the full amount of damages due in the case regardless of the centre's share of the liability as employer.

The directors would then have to pursue the centre, which was in compulsory liquidation, for its share of the damages.

As the two directors had been "the prime movers in the campaign of discriminatory behaviour" which had led to the employees' dismissal, it was irrelevant what percentage of the damages each should be liable for individually, the judge said.