World @ Work - May 2017 Edition 15 May 2017 Discrimination in service provision: How far is too far?

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Businesses are often challenged to not only recognise and facilitate diversity among their employees, but also in the people to whom they provide goods and services.  In most jurisdictions, businesses are prohibited from discriminating against prospective customers.  


A recent and prominent Northern Ireland case concerning this type of discrimination involved the refusal by Christian bakery owners to bake a cake bearing the slogan "Support Gay Marriage".  After the customer was successful in a claim of direct discrimination, the bakery owners appealed to the Northern Ireland Court of Appeal (NICA).  They argued that they should be allowed to refuse to make the cake because of their rights to freedom of thought and conscience.  The NICA disagreed, finding that the owners' refusal to bake the cake constituted direct discrimination.  This case makes clear that the religious beliefs of a provider of goods and services do not provide a justification for them refusing to provide goods or services on an unlawfully discriminatory basis.

It is likely that had this case arisen in Spain, a similar result would have been reached because there was no legitimate purpose for the refusal.  However, it is unlikely that German courts would rule the same way.  Outside of employment relationships, no specific anti-discrimination laws apply to individuals or private companies in Germany.  This means companies and individuals are generally free to decide whether or not to contract with another party for whatever reasons.

Further, while sexual orientation is not a protected characteristic in Hong Kong with respect to private citizens, there is a right for all Hong Kong residents to be equal before the law as contained in the Basic Law and Hong Kong Bill of Rights. 

How to mange competing interests? 

In some situations, anti-discrimination laws place a positive obligation on an organisation providing goods or services to promote or even prefer the interests of a person with a protected characteristic, such as by making reasonable accommodations or adjustments for persons with disability.  The limits of that obligation are constantly being tested, in a variety of circumstances. 

In late 2016, the UK Supreme Court decided a claim by a wheelchair user who had tried to board a bus but was unable to board because the wheelchair area on the bus was already occupied by a woman with a pram who refused to move.  The issue was whether the bus company's policy, which was that if a non-wheelchair user refused to move when requested, nothing more could be done by the driver and the wheelchair user would not be allowed to board the bus, was sufficient to discharge its obligation to make reasonable adjustments under the Equality Act 2010.  The Supreme Court found that the policy was insufficient, but also found that the duty to make reasonable adjustments did not require the bus company to guarantee the wheelchair user a place on the bus or to order other passengers off the bus.  Instead, it found that the driver should do what is "reasonable" in the circumstances, including perhaps stopping the bus and "shaming" the person occupying the wheelchair space into moving.

It is likely that a similar outcome would have been reached had the case been brought in Germany or Hong Kong.

In another European example, in Spain the Central Administrative Court of Public Contracts of Navarra on 8 August 2016 declared that tender documents which granted a higher number of contracts to entities fully formed by women was discriminatory.  The low representation of women in the sector did not justify applying criteria not linked to the object of the contract and did not imply an advantage for the service.

Protections extend to associates of people with protected attributes 

The potential reach of anti-discrimination law into the area of goods and services is illustrated by a 2016 Australian decision which involved a woman who was booked to give birth to her baby at a Sydney hospital.

The woman's husband was deaf, and when making arrangements for the birth, the hospital refused to provide interpreting services for the father at the birth, on the grounds that he was not the patient.  The woman was told that she could bring an interpreter, at her own cost, or another family member to help her husband communicate with the staff.  In overturning the first instance judge's decision to dismiss the woman's discrimination claim, the Federal Court stressed that the law preventing discrimination on the grounds of disability includes a prohibition on discrimination based on the disability of an associate of a person, and in these circumstances there was an arguable case that the woman had been treated less favourably because of her husband's disability. 

While the case eventually settled before being reheard, the Federal Court's decision is a reminder that anti-discrimination laws protect a wide variety of people based not just on their own attributes, but also attributes which they might be perceived to have or which others close to them have. This protection applies in Spain, the UK, Australia and France. In Hong Kong, it only applies with respect to disability and race discrimination.  

In a Spanish example, the law on the rights of people with disability also prohibits discrimination against individuals associated to disabled people when the discrimination is based on the connection with the disabled person.   

New business models: How do they interact with anti-discrimination laws? 

We anticipate that as more and more businesses move to alternative service and product delivery models, the scope and boundaries of anti-discrimination law will be tested in other ways (except in Germany where no specific anti-discrimination laws apply to individuals and private companies outside of employment relationships).  Businesses in the "gig economy" are already challenging the reach of employment law, and their next test may be the application of anti-discrimination laws to their activities.  There is, so far, very little case law in this area. 

Similarly, there are likely to be new issues arising as the application of anti-discrimination laws to businesses which offer their services exclusively online is tested.  For example, online financial services and insurance providers often restrict services to people aged over 18 years, with email accounts.  These models may unlawfully discriminate on the grounds of age and/or disability. 

So, it remains to be seen how far is too far, when it comes to the requirements of diversity, discrimination and equal opportunity laws around the globe. 


Contributors: George Cooper, Partner; Nataline Fleury, Partner; Jon Lovell, Partner; Andreas Mauroschat, Partner; Diana Rodrigues Redondo, Partner; Julie Mills, Expertise Counsel;  Emily Austin, Senior Associate; Karen Mitra, Senior Associate; Hannah Martin, Associate; Cristina Grande, Attorney; Naota Suzuki, Lawyer; and Julian Leicht, Research Assistant.

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The information provided is not intended to be a comprehensive review of all developments in the law and practice, or to cover all aspects of those referred to. Readers should take legal advice before applying it to specific issues or transactions.

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