In Lisboa -v- Realpubs Limited and others the Employment Appeal Tribunal was asked to consider whether the employer’s policy of encouraging a wider clientele at what was previously recognised as a gay pub led to less favourable treatment of gay customers which in turn caused Mr Lisboa to resign in circumstances amounting to discriminatory constructive and wrongful dismissal. Although the case was decided on the basis of the legislation which applied prior to the implementation of the Equality Act 2010 the principles remain relevant.
The Coleherne pub in Earls Court was known as London’s first “gay pub”. However, by 2008 the pub was in decline and it was bought out by Realpubs Limited which had a reputation for reinventing failing pubs as gastropubs, offering high quality food and drink to all sections of the community. It was renamed as the Pembroke Arms. Mr Lisboa, an openly gay Brazilian man was recruited as assistant manager of the new Pembroke Arms. His employment lasted for 42 days (from 1/12/08 to 11/1/09). In his second week of employment he was instructed to put up a board outside the pub saying “this is not a gay pub”. He refused and instead put up a notice saying “under new management – friendly staff”. In an email sent on 8 December a director said that they were making sure that people knew that it was no longer an exclusively gay pub and that they were barring “over the top” old customers but this needed “to be done right!!”. Staff were encouraged to seat customers who did not appear to be gay in prominent places so they could be seen from outside the pub. The employer also took steps to achieve its policy of having an even balance between the sexes in the staff working at the pub.
The repositioning policy apparently failed since the tribunal found that the clientele both before and after the re-launch remained at 90% gay.
The pub manager resigned on 30 December and Mr Lisboa decided to resign on the same day. A director tried to persuade him to stay and said that if he was resigning because of the “gay issue” he was sorry if he had not expressed himself properly on that issue. Mr Lisboa confirmed his resignation on 11 January. He brought claims of common law constructive dismissal and discrimination under the Sexual Orientation Regulations, alleging comments directed at him concerning his sexual orientation and a course of conduct by the employer under which he was put under pressure to work in a way which made the pub less welcoming to gay customers than to straight customers.
The tribunal found that there were examples of direct discrimination but rejected the claim based on the trading policy on the basis that Realpubs were operating on the basis of a legitimate commercial objective. It found that nothing was done to make the pub unwelcoming to gay customers in general or less welcoming to gay customers than other patrons.
The EAT identified the key issue in this regard as whether the repositioning of the pub went too far in embracing a policy of putting pressure on gay customers or taking negative steps which made the pub less welcoming to gay customers. The tribunal focused on the commercial objective of Realpubs but the EAT took the view it should have made a judgment about whether the wider factual matrix resulted in the old gay clientele being treated less favourable than the desired straight/family customer base on the grounds of their sexual orientation. Based on the facts that was “plainly and unarguably” the case. It followed that Realpubs was operating a policy which discriminated against gay customers so that Mr Lisboa’s reason for resigning was prompted by unlawful discrimination against customers. This was sufficient to constitute a repudiatory breach of the contract of employment on which to base the claim for constructive dismissal. The result is that the EAT reversed the decisions concerning associative discrimination and constructive dismissal and remitted the case to another employment tribunal to determine the amount of compensation payable to Mr Lisboa.
In response to the decision Realpubs said it respects all members of its team and welcomes all customers. It is considering an appeal. Although the law concerning discrimination based on working conditions and environment is fairly well established the case provides an interesting demonstration of how an ostensibly well-intentioned employer can nonetheless fall foul of laws designed to protect against discrimination in circumstances in which its general policies and practice can lead to claims by individual employees.