Rebranding exercise amounted to discrimination on grounds of sexual orientation

09 Feb 2011

The EAT has decided, in the case of Lisboa v Realpubs Limited and Others, that a rebranding policy intended to make a pub more attractive to different sectors of the community and less attractive to gay customers could amount to direct discrimination. It also constituted a fundamental breach of an employee’s contract of employment, allowing him to resign and successfully claim constructive unfair dismissal.

In this case, the employee, Mr Lisboa, was an openly gay man. He was employed at the Coleherne pub, supposedly London’s first gay pub. In 2008, the pub was bought by Realpubs Limited, a business that bought up failing pubs and rebranded them as gastro pubs. Realpubs then took steps to make the pub less “gay friendly”, for example:

  • the employer suggested that a board should be put outside the pub saying “this is not a gay pub”;
  • in an exchange of emails, the Director of Realpubs told a stakeholder “we are no longer an exclusively gay pub” and “we are barring over the top old customers”;
  • staff were encouraged to seat customers, who did not appear to be gay, in prominent places so that they could be seen from outside the pub; and
  • there were also direct comments made to Mr Lisboa about being gay including a reference to “queens”.

At first instance, the Tribunal accepted that the comments made to Mr Lisboa amounted to discrimination. However, the Tribunal did not accept that the policy itself was discriminatory, nor that Mr Lisboa had sufficient grounds to succeed in his constructive unfair dismissal claim.

The EAT overturned the Tribunal’s decision and considered that gay customers and staff were “plainly and unarguably” treated less favourably on grounds of their sexuality due to the company’s rebranding policy. It also accepted that, because of this finding, Mr Lisboa was entitled to resign and claim constructive unfair dismissal.

The employer in this case tried to argue that the policy was not discriminatory, since its primary aim was to make the pub more attractive to a wider community. However, it was clear from the comments made by the employer and the idea of displaying a sign saying “this is not a gay pub”, that the effect of the policy was to dissuade gay customers from visiting the pub.

This case ties in with the recent case involving Countryfile (discussed in the following article) and the balancing act employers must undertake when seeking to brand or rebrand their products to appeal to a new audience, without discriminating against the current clientele.