Agency Workers – Outside the Scope of Discrimination Protection?

As employment relationships become ever more complex the scope of employment protection appears to be ever more difficult to predict. This is illustrated in three recent cases dealing with agency workers, or those in agency or atypical type employment relationships. In order to come under the protection of employment legislation workers need to “fit” into one of the definitions of protected workers defined in the relevant legislation. It is getting ever more difficult to “fit” workers to these arguably unhelpful definitions.

In Muschett v HM Prison Service, the Court of Appeal considered the employment status of an agency worker for, amongst other things, the purpose of the Race Relations Act 1976. As the agency worker failed to satisfy the definition of “employee” or “contract worker”  the worker’s claims against the end user, HMPS, failed exposing a gap in the whole of protection for such workers. Only in cases where an agency worker is an employee of the agency will they be considered “contract workers” and therefore come under the protection of the discrimination legislation which may lead to agencies refusing to employ their workers to ensure their clients are protected from potential liability in this way.

Earlier this year in May and Baker Ltd v Okerago the Employment Appeal Tribunal upheld May and Baker’s appeal against decision of the Employment Tribunal that it was vicariously liable for a racially offensive remark made by Ms Dower, an agency worker, to its employee Ms Okerago. This case confirms that an employer is not vicariousy liable for the discriminatory acts of agency workers.

More recently, however in Leeds City Council v Woodhouse and Ors, the Court of Appeal has allowed a race discrimination claim to be brought against Leeds City Council by an employee of West North West Homes Leeds Limited, an Arms Length Management Organisation (ALMO).

The decision means that if someone employed by an ALMO believes they have been discriminated against by a Council or a Council’s employees, they are likely to be able to pursue a discrimination claim against the Council even though they are not their employer.

The claimant in the case Mr Woodhouse claimed that he had been abused and discriminated against on the grounds of his race by an employee of Leeds City Council. He pursued a claim against the Council. As the Council were not his employer they argued as a preliminary issue that he could not pursue a claim against them for discrimination in employment.

However, the Employment Tribunal in this case, held that the “extreme closeness of the relationship” between the ALMO and the Council was sufficient to enable the employee to bring a claim against the Council. The Court of Appeal agreed with this conclusion. This was particularly the case because the ALMO had only one customer, the Council, existed only in order to provide management services to the Council, and was a wholly owned subsidiary of the Council.

The decsion means that discrimination claims may be pursued where the alleged harassment or discrimination is carried out by a Council employee, for whom the ALMO would not normally be liable. The decision is welcome however, as it advocates a pragmatic approach to the question of the employment status of the workers involved having regard to the facts of the employment relationship rather than written terms of service.

However, these cases reveal in our opinion a lack of consistency which is in our view undesirable in such an important area of law. We believe a more cohesive approach is required to ensure that all workers are protected, no matter what the organisational structures of those for whom they are carrying out work.