Philip Parr v MSR Partners LLP (Formerly Moore Stephens LLP)
| Jurisdiction | England & Wales |
| Judge | Lady Justice Elisabeth Laing,Lord Justice Bean,Lord Justice Lewis |
| Judgment Date | 14 January 2022 |
| Neutral Citation | [2022] EWCA Civ 24 |
| Docket Number | Case No: A2/2021/1372 |
| Year | 2022 |
| Court | Court of Appeal (Civil Division) |
[2022] EWCA Civ 24
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE EMPLOYMENT APPEAL TRIBUNAL
MATHEW GULLICK QC
UKEAT/0238/20/OO
Royal Courts of Justice
Strand, London, WC2A 2LL
Lord Justice Bean
Lord Justice Lewis
and
Lady Justice Elisabeth Laing
Case No: A2/2021/1372
Jonathan Cohen QC (instructed by CM Murray LLP) for the Appellant
Daniel Stilitz QC (instructed by Addleshaw Goddard LLP) for the Respondents
Hearing date: 16 December 2021
Approved Judgment
This judgment was handed down remotely at 10:30 on 14 January 2022 by circulation to the parties or their representatives by email and by release to BAILII and the National Archives.
In January 2019 the Appellant Philip Parr brought employment tribunal proceedings alleging direct age discrimination by the Respondents. An issue was raised as to whether the claim had been issued in time, which was dealt with at a Preliminary Hearing in the ET at London Central before Employment Judge Elliott on 11 and 12 September 2019. EJ Elliott determined that the Respondents' acts complained of amounted to “conduct extending over a period” within the terms of s 123(3)(a) of the Equality Act 2010 and that the claim had therefore been issued in time.
The Respondents appealed to the Employment Appeal Tribunal. By a decision handed down on 24 June 2021 Mathew Gullick QC, sitting in the EAT as a deputy High Court judge (“the judge”), held that there had been no “conduct extending over a period” beyond 30 April 2018 and that the claim was therefore out of time. He allowed the Respondents' appeal, set aside the finding of the ET, and remitted the claim to the ET (if practicable, EJ Elliott) to determine whether to extend time for the presentation of the claim form on what is generally known as the “just and equitable” ground. The judge granted Mr Parr permission to appeal to this court.
The facts
Mr Parr was born in 1958. He had a long career at the accountancy firm which became the First Respondent, joining in 1982. He was promoted to salaried partner in 1988 and became an equity partner in 1995. At that time, the firm was a partnership subject to the Partnership Act 1890. It became a limited liability partnership (“LLP”) in 2005. Mr Parr became a member of the LLP and retained the status of equity partner under the LLP membership agreement (“the Members' Agreement”). At the times material to this claim, Simon Gallagher, the Second Respondent, was the Managing Partner. The Third to Eighth Respondents were the members of the Partnership Committee.
Clause 1 of the Members' Agreement, as in force at the material time, contained the following definitions, insofar as material:
“Accounts Date means 30 April in each year and/or such other date as the Partnership Committee may determine, subject to the approval of a Simple Majority of the Equity Partners
Effective Date means 3 October 2005
Equity Partners means the persons named in part 1 of schedule 1 and any other person appointed as an Equity Partner after the Effective Date, other than any Retired Member, and for the avoidance of doubt may, pursuant to clause 26.4, in certain cases include some or all of the Fixed Share Partners …
Fixed Share Partner means the persons named in part 3 of schedule 1 and any other person appointed as a Fixed Share Partner, other than any Retired Member
Members means the Equity Partners and Partners
Normal Retirement Date has the meaning ascribed to it at clause 29.2
Partners means the persons named in part 2 of schedule 1 and any other person appointed as a Partner after the Effective Date, other than any Retired Member
Retired Member means a Statutory Member who has in accordance with this Agreement retired or ceased to be a Statutory Member
Salaried Partners means those employees of the LLP Business who have been admitted as Statutory Members from time to time and whose rights are governed by their separate contracts of employment, other than any Retired Member
Statutory Members means the Equity Partners, Partners, Fixed Share Partners and Salaried Partners”
Clause 29 of the Members' Agreement made provision in relation to retirement of Members (i.e. both Equity Partners and other Partners) who had reached the age of 60:
“29.2 Subject to clause 29.4, each Member shall in any event retire on the Accounts Date next following his 60th birthday (the Normal Retirement Date).
29.3 In agreeing to the Normal Retirement Date, the Members have given careful consideration to the requirements of the Equality Act 2010. It has been agreed between them that the default retirement age is objectively justified and is a proportionate and reasonable means of achieving the legitimate aims of enabling proper succession planning for both the LLP Business and the Members. It also contributes to achieving a number of other benefits including:
(a) ensuring the sustainability of the LLP by seeking to ensure that there are Members in all areas of expertise, by strategically planning the size and shape of the LLP's membership;
(b) providing room to grow the membership of the LLP, fulfilling recruitment needs and promotion expectations;
(c) developing a collegiate and supportive culture within the LLP and seeking to avoid the compulsory retirement of senior Members for other reasons; and
(d) enabling Members to plan their retirements and execute them successfully in terms of handing over Clients and preparing themselves for the opportunities of retirement.
29.4 Subject to the approval of the Partnership Committee, the Managing Partner may extend the Normal Retirement Date of an individual Member in circumstances where that Member indicates he wishes to continue as a Member or if the Managing Partner asks the Member to continue as a Member. The Managing Partner may only agree to such an extension where he objectively considers that there is a valid business case for so doing, having reference to the on-going contribution to the LLP Business by the Member concerned and the matters set out at clause 29.5. Any agreed extension shall be for a specific period of time, the conclusion of which will represent the Member's Normal Retirement Date and shall be on such terms as to remuneration and otherwise the Managing Partner may determine. The Managing Partner may alternatively agree that any retired Member may be employed by the LLP on such terms as the Managing Partner shall determine.”
Mr Parr's Normal Retirement Date, calculated in accordance with Clause 29.2, was 30 April 2018, that is to say the accounting date following his 60th birthday in February 2018.
Several months prior to his 60th birthday the Appellant proposed that he should continue with the firm and not retire, on the basis that there was a business case for him to do so. Mr Gallagher recommended to the Partnership Committee that the Appellant be permitted to remain as a member of the LLP for two years beyond his Normal Retirement Date, i.e. until 30 April 2020, but not as an Equity Partner. Mr Gallagher's evidence was that although he considered that there was a case for the Appellant to continue with the firm beyond his Normal Retirement Date, he did not consider that the Appellant was contributing to the business as an Equity Partner should. The Committee accepted the recommendation.
On 13 October 2017, the Appellant and the First Respondent entered into a Deed, referred to as a De-Equitisation Agreement, setting out the terms upon which Mr Parr would remain a Member after 30 April 2018. This provided that after that date, he would cease to be an Equity Partner under the Members' Agreement and would become an ordinary Partner. Clauses 1 and 2 of the Deed provided:
“1. Any capitalised terms used in this Deed and not defined shall have the meanings ascribed to them in the Members' Agreement.
2. The Relevant Member [i.e. the Claimant] shall cease to be an Equity Partner and become a Partner with effect from the Transition Date.”
The Employment Judge found that the Claimant had faced a choice between remaining as an ordinary Partner or leaving the firm completely. He was not given the option to remain as an Equity Partner. In those circumstances, he chose to remain as an ordinary Partner. Mr Gallagher's evidence, which was not in dispute and was accepted by the ET, was that in at least three previous instances the discretion had been exercised differently so as to permit Equity Partners to continue as such after what would have been their Normal Retirement Date.
The Claimant was dissatisfied at not being offered a further period as an Equity Partner. However, he took the view that the difference between his earnings as an Equity Partner and his future earnings as an ordinary Partner was not so significant as to cause him to take legal advice on his position. At around the time that the De-Equitisation Agreement was entered into, he believed that his loss would be a reduction in income of the order of £31,000 in the subsequent financial year. He considered, with that figure in mind, that any legal action he might take would cost a considerable amount of money in legal fees in comparison to the possible benefit from it. The ET accepted the Claimant's evidence that when he entered into the De-Equitisation Agreement he knew that he would lose out but he did not anticipate the full extent of his potential losses, which were dependent on future events.
The Appellant's status therefore changed at the end of April 2018 from that of Equity Partner to ordinary Partner. He was repaid the capital sum which he had invested in the business. After that he was not required to make any further capital...
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