The Court of Appeal has held in Boohene and others v Royal Parks Ltd that contractors could not bring a claim of indirect race discrimination against the principal they worked for in relation to their employer's failure to pay them the London Living Wage (LLW).
The claimants were contract workers employed by Vinci Construction UK Ltd (Vinci) to provide services to Royal Parks Ltd (RPL), a charity responsible for the management of royal parks. RPL's directly-employed workforce, which consisted of mainly office jobs, was predominantly white and was paid the LLW. RPL's outsourced functions, mainly involving manual work, were handled by different contractors. It was RPL's policy not to require contractors to pay its workers the LLW, or to fund them to do so by pricing contracts on that basis. Vinci, which entered into a cleaning contract with RPL, did not pay LLW rates to the contract workers. The contractors brought an indirect discrimination claim against RPL for failing to pay them the LLW. They alleged that RPL had applied a provision, criterion or practice (PCP) of paying its own employees the LLW, but not requiring its contract workers to be paid the LLW. They said that this indirectly discriminated against them on grounds of race (all but one of the contractors were from a black or minority ethnic background). The claim was brought under section 41 of the Equality Act 2010 (EqA 2010), which provides that contractors are protected against discrimination by the end-user of their services (the principal).
The tribunal upheld the claims, finding that a PCP was applied which disproportionately disadvantaged black and minority ethnic workers and could not be objectively justified. On appeal, the Employment Appeal Tribunal (EAT) disagreed, finding that the claimants and the tribunal had proceeded on the basis of an illogical PCP and pool for comparison (as the claimants had failed to produce any evidence of the application of the PCP to a pool including all-outsourced workers, rather than workers on the Vinci contract only). The EAT found though that it was open to the tribunal to find that section 41 was engaged as RPL had dictated the terms on which the contractors were engaged.
On further appeal the Court of Appeal upheld the EATs finding on the PCP and pool. However, it also held that the claimants' complaints fell outside section 41 in any event as they were concerned with rights arising from the employer-worker relationship, and not the principal-worker relationship. The claimants had no claim against RPL because the discrimination relied on related to a term of their contracts with Vinci, irrespective of any influence that the charity had over the content of those contracts through its decision not to pay or fund the LLW. Section 41 applies to the "terms on which the principal allows the worker to do the work" and so, the Court reasoned, is concerned with a stipulation imposed by a principal on a worker and not with any stipulation imposed by a principal on the worker's employer.
It followed that RPL could not be regarded as having applied any PCP to the contractors and so the indirect discrimination claim could not be allowed.
Take note: This decision will be a welcome clarification for employers who outsource functions. Following the decision in Boohene it will not be possible for a claim for contract worker discrimination to succeed where the alleged discrimination arises from the terms of a contract worker's contract with their own employer, even if the terms of that contract are in some way controlled by the principal.
