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Lisboa v. Real Pubs Ltd (1) Pring (2) Heap (3)


Employment Appeal Tribunal

1. In September 2008 R1 acquired a public house then called the Coleherne. It had enjoyed a national and international reputation for being London’s first ‘gay pub’. However, at the time it was acquired by R1 it had fallen into a state of decline and R1 sought to ‘reposition’ it as a gastropub, offering food and drink to a wider section of the community. The pub underwent a refurbishment and was re-launched as the Pembroke Arms on 5 December 2008.

2. C, an openly gay Brazilian man, was employed by R1 to work at the Pembroke Arms as an assistant manager. His employment commenced on 1 December 2008 and ended with his resignation on 11 January 2009. During his employment, C objected to the way in which R1 went about seeking to ‘reposition’ the pub, which he believed amounted to direct discrimination against gay customers on grounds of sexual orientation. On resigning C stated he was out of sympathy with R1 and what they represented, felt unable to work for them and would have nothing to do with the kind of business R1 was seeking to build.

3. C brought a claim for unlawful direct discrimination against the Respondents under the Employment Equality (Sexual Orientation) Regulations 2003 (‘the 2003 Regulations’) and a constructive wrongful dismissal claim against R1. The claim under the 2003 Regulations was put in two ways: firstly, that discriminatory comments were made to C directly, and secondly, that C was put under pressure to work in and co-operate with a policy of making the pub less welcoming to gay customers. The second limb of the claim was based on the decision in Wethersfield v Sargent [1999] IRLR 94 (CA) and was referred to as such by the ET.

4. The ET accepted the first part of C’s claim and awarded damages for injury to feelings on that basis. However, it rejected the Wethersfield claim. The ET found that the policy of aiming to broaden the appeal of the pub to wider sections of the community was unobjectionable. Furthermore, the measures adopted to achieve this strategy, which included, the 'showcasing' of customers who did not appear to be gay by seating them in prominent positions where they would be visible to the outside, increasing the number of female staff (whether or not that entailed sex discrimination), and instructing a member of staff to display a sign stating, ‘this is not a gay pub’ (the sign was not actually displayed after the Claimant protested), where not instances of discrimination but rather ‘the manifestations of the legitimate policy of seeking to ‘sell’ the pub to a wider public’. The ET further concluded that although the discriminatory comments directed at C amounted to a repudiation of the contract, C had not resigned in response to that repudiation, but rather due to his ‘mistaken perception that Realpubs were a homophobic organisation in pursuit of a homophobic policy to disadvantage the Coleherne’s gay clientele’. As such, the ET dismissed C’s claim for constructive dismissal.


5. The EAT, HHJ Peter Clark presiding, accepted that following Wethersfield v Sargent and Showboat Entertainment Centre Ltd v Owens [1984] IRLR 7, a policy whereby an employee is required to discriminate against customers on grounds of sexual orientation is rendered unlawful by regulation 3 and 4 of the 2003 Regulations. It further accepted C’s case that the ET had fallen into error by stopping their enquiry at the point where they found that the re-positioning strategy itself was lawful. They had failed to properly examine the measures adopted by the Respondents in putting that policy into practice. The EAT characterised the issue thus, ‘a policy of embracing diversity and welcoming inclusiveness is laudable; discriminating against gay customers and staff on grounds of their sexual orientation is not; it is unlawful’.

6. The EAT also noted that it was necessary to consider the ET’s findings cumulatively, having regard to the overall factual matrix and drawing on the ‘valuable’ guidance of Mummery P in Qureshi v Victoria University of Manchester [2001] ICR 863 (note), approved by the Court of Appeal in Anya v University of Oxford [2001] ICR 847.

7. The EAT went on to hold that on the facts as found by the ET, it was clearly and unarguably the case that gay customers were treated less favourably on grounds of their sexual orientation. Consequently the Wethersfield v Sargent claim should succeed. On that basis the constructive dismissal claim also succeeded.

8. However, the EAT added that even if it had upheld the ET’s finding in relation to the Wethersfield claim, it would still have reversed the finding of no constructive dismissal as the discriminatory comments directed at C were a ‘contributory factor’ in his decision to resign and this was enough for the purposes of constructive dismissal following Nottinghamshire County Council v Meikle 2004] IRLR 702, (CA) and Abbycars (West Horndon) Ltd v Ford UKEAT/0472/07/DA (EAT).

9. The appeal was allowed with directions for the claim to be remitted to a fresh ET for a consideration of quantum.

Counsel for the appellant: Ben Cooper, led by Andrew Hochhauser QC
For the respondents: Spencer Keen

LTL 13/1/2011

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