Clarifying Agent Liability under Section 109 of the Equality Act 2010: Common Law Agency and Post-Employment Indirect Age Discrimination

Introduction

This landmark decision in Fasano v Reckitt Benckiser Group Plc & Anor ([2025] EWCA Civ 592) arises from an appeal against findings of indirect age discrimination under the Equality Act 2010. The appellant, Mr Fasano, claimed that amendments to a long-term incentive plan (LTIP) made after his retirement amounted to indirect discrimination on grounds of age. He sued both his former employer, Reckitt Benckiser Health Ltd (“RB Health”), and its parent company, Reckitt Benckiser Group Plc (“RB Group”), arguing that RB Group acted as RB Health’s agent when it changed the LTIP rules. The Employment Tribunal, followed by the Employment Appeal Tribunal (EAT), reached conflicting conclusions on agency and justification. On appeal, the Court of Appeal was asked to determine (1) whether RB Group was acting as agent for RB Health and thus liable under section 109 of the 2010 Act, and (2) whether the post-employment “provision, criterion or practice” (PCP) requiring employment as at 18 September 2019 was a proportionate means of achieving a legitimate aim.

Summary of the Judgment

The Court of Appeal, unanimously, held:

“Agent” in sections 109 and 110 of the Equality Act 2010 must be given its ordinary common-law meaning.
On the facts found by the Employment Tribunal, RB Group was not acting as agent for RB Health when it amended the LTIP rules on 18 September 2019, so RB Health cannot be held liable under section 109 for those changes.
The PCP requiring participants to be in employment as of 18 September 2019 and remain employed until May 2020 in order to benefit from the amended LTIP was a proportionate means of achieving the legitimate aim of employee retention; consequently, there was no indirect age discrimination under section 19(2)(d).
The appeal is therefore dismissed in its entirety.

Analysis

1. Precedents Cited

Bowstead & Reynolds on Agency (23rd edn): Defines agency as “the fiduciary relationship which exists between two persons, one of whom expressly or impliedly manifests assent that the other should act on his behalf so as to affect his legal relations with third parties…”.
Ministry of Defence v Kemeh [2014] ICR 625: Elias LJ affirmed that agency must be interpreted by reference to common-law concepts and rejected attempts to extend “agency” merely for legislative purpose beyond its accepted meaning.
Blackwood v Birmingham & Solihull Mental Health NHS Trust [2016] IRLR 878: Underhill LJ reiterated that sections 109–110 of the Equality Act 2010 adopt the ordinary law of agency.
Unite the Union v Nailard [2019] ICR 28: Underhill LJ confirmed that internal group structures do not give rise to agency absent clear assent or control.

2. Legal Reasoning

(a) Meaning of “Agent” under Sections 109–110 EA 2010
The court held that Parliament’s use of “agent” and “principal” imports the common-law meaning. Control, assent, and the intention to bind a principal vis-à-vis third parties are the hallmarks of agency. Simply operating a share-awards scheme for subsidiary employees does not create an agency relationship without evidence that the subsidiary authorised or controlled the parent company’s actions.

(b) Application to the LTIP Amendment
RB Group’s authority derived from its own shareholders and directors. RB Health neither controlled nor expressly assented to RB Group’s decision-making on LTIP amendments. Accordingly, RB Group was not RB Health’s agent when it waived 50% of the performance conditions for employees in post on 18 September 2019.

(c) Justification of the PCP
Indirect discrimination under section 19 requires that the PCP be a proportionate means of achieving a legitimate aim. The court endorsed the Employment Tribunal’s finding that the aim was staff retention during leadership transition and potential restructuring. The PCP—requiring continued employment from 18 September 2019 to May 2020—directly served that aim and was justified as proportionate.

3. Impact on Future Cases

Employers and group-structured companies must look to common-law agency principles when assessing vicarious liability under sections 109–110 EA 2010.
Post-employment benefits and amendments that operate solely through an entity not acting as agent for the former employer are unlikely to give rise to discrimination liability against that employer.
The decision clarifies that PCPs must be evaluated holistically in justification, ensuring each element of the practice materially contributes to the legitimate aim.

Complex Concepts Simplified

Provision, Criterion or Practice (PCP): Any rule or condition applied by a person. Here, the rule that one must be employed on a specific date to benefit from amended share awards.
Vesting: The point at which share awards or options become exercisable by the participant.
Agency: A legal relationship in which one party (the agent) acts on behalf of another (the principal) and can bind the principal in dealings with third parties. Key factors: assent, authority, control over the agent’s actions.
Proportionate Means of Achieving a Legitimate Aim: A defence in indirect discrimination law requiring that the discriminatory effect of a PCP be outweighed by its necessity and appropriateness to achieve a genuine objective.

Conclusion

The Court of Appeal’s decision in Fasano v Reckitt Benckiser establishes two critical principles:

Sections 109–110 of the Equality Act 2010 adopt the ordinary common-law definition of agency. Without clear assent and control, a parent company does not become the agent of its subsidiary simply by operating a benefits scheme.
A PCP that requires continued employment from a specified date to vest share awards can be a proportionate and justified means of staff retention, even if it excludes former employees from post-employment benefits.

This judgment will guide tribunals and litigants on the limits of vicarious liability within corporate groups and the proper assessment of justification in indirect discrimination claims.