Liability for discrimination extends further than you think

01/10/2009

By Nick Hobden, Partner and Head of Employment.

When considering liability for acts of discrimination, employers will typically concern themselves only with their own staff. But what of people working for you who are not your employees, such as the employees of contractors or indeed agency staff? The case of Leeds City Council v Woodhouse and others provides some useful guidance.

Mr Woodhouse, who was of African Caribbean origin, worked for a company owned by Leeds City Council. The company managed the Council's houses under an "arm's length" management agreement. In his dealings with one of the council's employees, Mr Woodhouse felt that he had been subjected to racially derogatory comments. These resulted in him commencing Employment Tribunal (ET) proceedings against his employer, the Council and the Council's employee.

Both the Council and its employee sought to strike out the claims against them on the ground that the ET had no jurisdiction to hear them. But the ET rejected these strike out applications and ordered that the claims should be allowed to proceed. The Council and its employee appealed to the Employment Appeal Tribunal (EAT).

The case hinged on the correct interpretation of section 7 of the Race Relations Act 1976. This section protects workers who are doing "work for" a person who is not their employer under a contract with that person. The ET had concluded that in his dealings with the Council's employee (when he was subjected to the alleged discrimination), Mr Woodhouse had been doing "work for" the Council because they had enjoyed the benefit of that work. The Council's and its employee's appeal was based on the argument that this decision was wrong and that Mr Woodhouse was working solely for his own employer.

The EAT rejected the appeal and upheld the ET's decision. Relying upon previous case law, the EAT concluded that the law in this area ought to be construed quite broadly, ensuring the widest amount of protection from discrimination. As a result, the ET was right to adopt an approach of considering for whose benefit the work was done and therefore concluding the matter in the employee's favour.

If the test in circumstances such as these is whether the work being done by the individual is for the benefit of the third party and the discrimination is in relation to that work, then the range of circumstances in which claims could be brought could be very wide indeed. Wherever a company seeks to contract out parts of its operation, engages agency workers or purchases the services of any external contractor, the people who actually do the work (provide the services) for the benefit of that company are likely to be able to bring claims against the company (and indeed its employees) if they believe that they have been subjected to discriminatory treatment.