Discrimination - Principal Liable to Contract Worker

In "Leeds City Council v Woodhouse" the claimant worked for a commercial organisation responsible for the management and maintenance of Leeds council housing.
UK Employment and HR
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In Leeds City Council v Woodhouse the claimant worked for a commercial organisation responsible for the management and maintenance of Leeds council housing.  He alleged that he had been racially abused, to his face and behind his back, by an employee in the council's housing team with whom he had dealings at work.

The Court of Appeal has upheld an EAT decision that Leeds City Council was liable for these acts of racial discrimination and harassment by one of its employees.  In doing so it confirmed the wide application of s.7 of the Race Relations Act, which states that it is unlawful for a principal to discriminate against a contract worker on grounds of race.

In its judgment, the Court of Appeal dealt with the following questions – do contract workers need to be under the principal's managerial power or control in order to bring such a claim directly against them? Should the court ask whether they were treated as employees? Or whether the principal controlled in any way the conditions under which they worked?

The answer to all these questions is No.

It was enough to say that their work was for the commercial benefit of the principal to make the principal directly liable.

Points to Note –

  • This wide interpretation of a principal's liability is intended to prevent employers from escaping liability under the anti-discrimination laws by bringing in sub-contractors.
  • The Court of Appeal confirmed that the test in such cases will be very fact-specific and will depend on the terms of the contract between the principal and the contract worker's employer and also on how they actually conducted business in practice.
  • Why did the claimant not bring his claim against his employer? Because currently an employer may only be liable for unlawful harassment of employees by third parties if the harassment is persistent and is on grounds of sex. This should change when s.40 of the Equality Act 2010 comes into force. It will extend such liability over all the 'strands' of unlawful discrimination. We shall of course be keeping you informed as implementation of the Act begins in October 2010.

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The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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