Court ruling on outsourced workers’ pay disparities

Case Summary: The Royal Parks Ltd v Boohene and Others 

Background 

The case involved 16 cleaners employed by Vinci Construction UK Ltd, servicing a cleaning contract with The Royal Parks Ltd (applicant/respondent). The claimants alleged indirect race discrimination under section 41 of the Equality Act 2010, focusing on whether they could compare their treatment to that of The Royal Parks’ direct employees in terms of minimum rates of pay. The direct employees benefitted from better rates of pay . The outsourced workers, argued that they were more likely to be black or from other minority ethnic backgrounds than the direct employees and claimed this was indirect race discrimination 

Employment Tribunal (ET) Findings 

The ET initially upheld the cleaners' claim of indirect race discrimination. The ET determined that it was permissible to compare the claimants, as outsourced workers, to The Royal Parks' direct employees. 

Employment Appeal Tribunal (EAT) 

The Royal Parks Ltd appealed the ET's decision. The EAT set aside the ET's decision, ruling that the pool for comparison should include all outsourced workers on all contracts, not just some outsourced workers as the ET had found. This broader pool led to the dismissal of the claim of indirect race discrimination. 

Appeal 

The claimants filed an appeal against the EAT’s decision, arguing that the ET's narrower approach was correct. They contended that the EAT's broader pool created an over-inclusive and abstract comparison, placing an undue burden on them to prove issues beyond their initial claims. 

Ultimately, the Court of Appeal ruled that the Equality Act does not permit a discrimination claim against a principal (such as The Royal Parks Ltd) by individuals employed by a contractor regarding pay disparities with the principal’s own employees. The court noted that while The Royal Parks Ltd paid its direct employees the London Living Wage, it did not require its contractors to do the same for their staff. As above, the outsourced workers, were more likely to be black or from other minority ethnic backgrounds than the direct employees and claimed indirect race discrimination. However, the Court clarified that the Equality Act mandates that a principal must not discriminate against a contract worker concerning the terms on which the principal allows the worker to perform work.  

This provision does not extend to the terms of the employment contract between the worker and their employer (the contractor). Complaints about pay and other contractual matters can only be brought against the worker’s employer, not the client in an outsourcing relationship. 

Implications for Union Representatives 

1. Understanding Legal Boundaries

• The Court of Appeal's ruling clarifies that discrimination claims related to pay disparities between outsourced workers and a principal's direct employees cannot be brought against the principal. Union representatives need to understand and communicate that complaints about pay and other contractual matters must be directed at the worker’s direct employer (the contractor), not the principal (client) in an outsourcing relationship. 

2. Advising on Appropriate Claims

• Union representatives should guide members in correctly identifying the responsible party for their claims. In cases involving outsourced workers, representatives must ensure that claims regarding employment terms, such as pay, are directed towards the contractor. 

3. Navigating Comparison Pools in Discrimination Claims

• The case highlights the complexities of defining comparison pools in indirect discrimination claims. Representatives should be prepared for the challenges involved in proving disparate impact and be aware of the potential for broader interpretation by tribunals. The initial Employment Tribunal’s narrower approach to the comparison pool was overturned, indicating the need for meticulous preparation when framing such claims. 

4. Promoting Fair Employment Practices

• The ruling underscores the importance of advocating for fair employment practices in contracts between principals and contractors. Union representatives can push for contractual clauses that ensure outsourced workers receive comparable pay and benefits to direct employees, promoting equality and reducing the likelihood of discriminatory practices. 

5. Strategic Case Preparation

• Given the EAT's requirement for a broader comparison pool, representatives must ensure thorough case preparation. This includes considering all possible comparators and preparing evidence that addresses broader interpretations to avoid the dismissal of claims when other arguments may have succeeded if they had been pursued 

6. Emphasising Independent Legal Advice

• The importance of independent legal advice is crucial in settlement agreements and discrimination claims. Union representatives should ensure that members receive proper legal guidance to understand the implications of their employment terms and any potential claims.