The landmark decision of Lee v Ashers Baking Company Ltd and Others
[2018] UKSC 49, delivered by a unanimous Supreme Court on the 10th
of October 2018, has been the subject of extensive immediate commentary. I am
going to focus here on one issue, particularly relevant to commercial religion,
which has not been the focus of other comments.
One issue in the district
court was the extent to which the individual persons operating a small business
as a limited company, and the company itself, could assert religious rights in
the commercial sphere. The lower courts to some extent could avoid the issue,
as they found that the natural persons could not successfully claim their
religious rights to justify discrimination against a customer. A significant thread
of the unanimous judgment of the Supreme Court, delivered on this point by Lady
Hale, also avoids the issue, but by finding that there was no need to read down
the relevant sexual orientation discrimination laws to take account of
Convention rights, as there was no sexual orientation discrimination in the
first place (para.36).
In relation to
discrimination on the basis of political belief, however, Convention rights
were found to be relevant to understanding the Fair Employment and Treatment
(Northern Ireland) Order 1998 (pra.48). Religious rights under Article 9, and
expression rights under Article 10, were found to entitle a person to refuse to
“supply a cake iced with a message with which they profoundly disagreed”
(para.55). The religious and free expression rights of the natural persons
involved were found to have impacted on
their legal rights in a way not found by the lower courts. As a result,
the Supreme Court needed to turn, albeit very briefly, to the Convention rights
of companies such as Ashers Baking Company. The relevant passage, in full, is:
“As
the courts below reached a different conclusion on this issue, they did not
have to consider the position of the company separately from that of Mr and Mrs
McArthur. It is the case that in X v Switzerland (Application No
7865/77), Decision of 27 February 1979, and in Kustannus Oy Vapaa Ajattelija
Ab v Finland (Application No 20471/92), Decision of 15 April 1996, the
European Commission of Human Rights held that limited companies could not rely
upon article 9(1) to resist paying church taxes. In this case, however, to hold
the company liable when the McArthurs are not would effectively negate their
convention rights. In holding that the company is not liable, this court is not
holding that the company has rights under article 9; rather, it is upholding
the rights of the McArthurs under that article.” (para.57).
This single paragraph
touches on some extremely complex issues. The ECHR jurisprudence on this point
is notably thin, going no further than the two Commission decisions quoted.
What there is does not clearly lead on to the conclusion the Supreme Court
reaches. Instead, they are much more clearly in line with a First Tier Tax
Tribunal decision.
In Exmoor
Coast Boat Cruises Ltd v HM Revenue and Customs Commissioners [2014] UKFTT
1103 (TC) the applicant was a company with a single director and sole
shareholder. The company was required to file VAT returns electronically,
rather than on paper. A practising member of a religious society or order whose
beliefs were incompatible with the use of electronic communications was
entitled to an exemption to this requirement. The judge, Mosedale J, found that
the appellant did not have beliefs, and that “even if its director’s beliefs
were the beliefs to which the legislation referred, [he] is not a practising
member of a religious society or order” (para.54). Although finding that the
exemption was not engaged, Mosedale J was clear that a for-profit company might
have religious rights in some circumstances: “a company has human rights if and
to the extent it is the alter ego of a person (or, potentially, a group of
people). Therefore, it must be seen as being in the shoes of that person and must possess the same human rights
because any other decision would deny that person his human rights. Therefore,
while it is ludicrous to suggest a company has a religion, or private life or
family, nevertheless a company which is the alter ego of a person can be a
victim of a breach of A9 (the right to manifest its religion) if, were it not
so protected, that person’s human rights would be breached” (para 71-2).
Although phrasing the
decision as protecting the rights of the natural persons by excluding the legal
person from liability, the Supreme Court has opened up important questions
about religious rights and for-profit corporations. The debate has tended to
focus on whether such corporations can have religious rights. This part of Lee v Asher will no doubt contribute to
that debate, but it should also prompt new discussions around the basis for
corporations possession of fundamental rights (or in the Supreme Courts terms,
when they should be treated as if they had fundamental rights in order to
protect the rights of natural persons), and in particular a mature discussion
about what religious rights a
corporation may be capable of possessing, and how legal actors are to identify the religious beliefs of a
corporation. It may also contribute to understanding of the theoretical
foundations of company law – in particular has the Supreme Court provided some
support for an aggregate theory of legal corporation, where the corporate
represents a real interaction, a living existence, over a concession theory
where the corporation is simply a creature of positive law?
