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Is an end user liable for act an of discrimination committed by a subcontractor?

14 February 2014 #Employment


Unlawful acts (other than criminal offences) committed by employees in the course of their employment are treated as also having been done by their employer for discrimination law purposes. An employer may therefore be vicariously liable for an employee`s act of race discrimination, whether or not it was done with the employer`s knowledge or approval. But what about contract workers?

The Court of Appeal has just dealt with a case against the Ministry of Defence where it was the end user of services. Mr Kemeh, who is a black, was a British Army private working as a chef in the Falkland Islands Garrison. The MoD had contracted out catering functions to Serco who sub-contracted some of those to Sodexho.

Two incidents occurred. When working in the kitchen, a butcher employed by Sodexho said to Mr Kemeh, "Why should I trust you? First you are a Private in the British Army and then you are black."  Then in a separate incident, while discussing a football match, Mr Kemeh`s immediate line manager, Sergeant Simmons, told him to "shut up you dumb black bastard". Sergeant Simmons apologised and promised that his conduct would not be repeated.

Mr Kemeh brought proceedings for direct race discrimination against the MoD in respect of both comments. The MoD accepted that the comments had been made and that they were discriminatory. However, it denied liability for the comment of the Sodexho employee, arguing that she was not its agent. The tribunal held that she was its agent.

The MoD accepted liability for Sergeant Simmons` comment and the tribunal awarded Mr Kemeh £12,000 for injury to feelings. Sergeant Simmons had authority over Mr Kemeh and was responsible for his wellbeing. His comment caused Mr Kemeh considerable distress. It was found that his apology could have been more remorseful and was only made following an investigation. The MoD appealed against the amount awarded.

The EAT, applying common law principles, not the much looser test applied by the tribunal, overturned the finding that the MOD were liable for the act of its subcontractor. It considered that in this case there was no evidence to support the finding that a subcontractor`s employee was acting as an agent for the claimant`s employer. It also reduced the injury to feelings award.

On further appeal to the Court of Appeal, the EAT’s decision was upheld. In relation to the remark "shut up you dumb black bastard" made by the Sergeant, the court upheld the EAT`s decision to reduce the injury to feelings award from £12,000 to £6,000. In doing so, the court suggested that one-off incidents of this kind should be compensated using the lower band of the Vento guidelines and noted that the EAT was well placed to ensure consistency and fairness, given its overview of a range of cases.

Legal loop hole

In relation to the second incident, the Court of Appeal agreed that Sodexho could not be liable because of the different sets of rules relating to contract workers and employees. Hence, Mr Kemeh fell into a gap in the statutory protection. The legislation confers rights upon contract workers like the butcher in this case to bring a claim against the employer for whose ultimate benefit they provide services (the MoD here) but it does not impose liabilities on that person for the acts of the contract worker.  

The Court recognised that this potentially left the claimant without a remedy in respect of an act of race discrimination committed by the subcontractor’s employee. The key point to note from the case is that the Court suggested that Parliament may wish to reconsider this loop hole, although if it provides a remedy it will have to decide whether it is the contract worker`s immediate employer rather than the end user of the services who should bear the legal responsibility.

Comment

End users may wish to keep a careful eye on their contract terms with contractors in light of this case.

Clarkslegal, specialist Employment lawyers in London, Reading and throughout the Thames Valley.
For further information about this or any other Employment matter please contact Clarkslegal's employment team by email at employmentunit@clarkslegal.com by telephone 020 7539 8000 (London office), 0118 958 5321 (Reading office) or by completing the form on this page.

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