When determining a claim for indirect discrimination, tribunals have to examine if an employer’s policies and practices place people from certain protected groups at a disadvantage and, if so, whether it was justified.
In The Royal Parks Ltd v Boohene and ors, the Employment Appeal Tribunal held that the tribunal should have identified whether a “provision criterion or practice” had put certain workers with a protected characteristic at a disadvantage by making a comparison with all the contract workers affected by it.
Basic facts
The Royal Parks Ltd (RPL), which was created in 2017, was responsible for managing eight of London’s royal parks and other open spaces. Its predecessor took the decision in 2014 to outsource the contract for cleaning and maintenance of public toilets and awarded it to Vinci Construction Ltd.
Vinci set out two payment options in its bid – one which included the London Living Wage (LLW), and one which didn’t. Although RPL paid all its own workers the LLW, it rejected the bid under which LLW would be paid to the contract workers, whilst reserving the right to revisit the issue at any point during the contract. Following a re-tendering exercise in 2019 and after union involvement, RPL agreed that Vinci would pay the LLW to workers on the toilet and cleaning contract.
The claimants then lodged tribunal complaints of indirect race discrimination under sections 19 and 41 of the Equality Act 2010 for the period between 2014 and 2019. They argued that RPL had applied a PCP of paying its own employees the LLW but not those working on the outsourced toilet and cleaning contract with Vinci. This put black or minority ethnic workers (BME) at a particular disadvantage because they made up a higher proportion of contracted out workers than those who were directly employed by RPL.
Relevant law
Section 19 states that it is discriminatory for an employer to apply a PCP if it puts, or would put, the worker and those who share the worker’s protected characteristic at a particular disadvantage compared to those who don’t share that characteristic, unless it can be justified.
Section 41 states that where a “principal” makes work available to be done by an individual employed by another person and supplied to the principal under a contract, the individual contract worker can claim against the principal rather than against their employer.
Tribunal decision
The tribunal found that the claimants were contract workers as RPL made work available for them under a contract with Vinci who supplied the workers to do the work required under that contact. Turning to the question as to whether RPL had applied a PCP to the claimants, the tribunal held that RPL had made the decision as to whether the contract workers were paid the LLW.
In terms of the application of the PCP, the tribunal found that there was no material difference between the BME workers and their comparators since both were either employed by RPL or worked on the Vinci contract. In considering whether the PCP put BME workers at a particular disadvantage, the tribunal found that 66.66% of the BME workers in the pool did not receive LLW as a minimum wage compared to 6.66% of the white/non-BME employees.
RPL appealed on the basis that the tribunal had identified the wrong PCP. It had also taken the wrong approach to determining the relevant pool for comparison.
EAT decision
The EAT agreed that the claimants could claim against RPL as the principal because it had effectively dictated the terms on which the contract workers were required to carry out the work. It had chosen the option not to pay them the LLW while Vinci had just executed their decision.
However, the tribunal had made an error of law when determining the PCP which then led to an “indefensible pool” for comparison. In particular, by limiting the PCP to RPL’s direct employees and the workers on the toilets and cleaning contract, it had excluded all other outsourced workers undertaking work for RPL.
When analysing the impact of a PCP, the pool being considered should consist of the entire group it affects either positively or negatively, while excluding those who are not affected by it. By adopting such a narrow pool, the tribunal’s approach to the comparative exercise had been fatally undermined.
The EAT, therefore, allowed the appeal.
Comment
The case clarifies the circumstances when contract workers may bring a claim of indirect discrimination against a principal, namely, where that principal effectively dictates the terms on which a worker carries out the work. The fact that it is the contractor who implements those terms does not prevent a claim for discrimination being brought against the principal.
The case is also a reminder of the importance of identifying the correct PCP. The EAT gave short shrift to the claimants’ argument that they could not have pursued a wider PCP because they had no knowledge of the other service contracts. The EAT commented that had the claimants requested that information, the employer could not have dismissed it as a “fishing expedition”.