Employment status

[Thanks to Chris Milsom of St Philips Chambers for providing this case summary]

In Leeds City Council v Woodhouse and anr, the Court of Appeal (Smith LJ giving leading judgment) has shed light on the meaning of a "contract worker" as defined in s7 RRA 1976.

W issued a claim of race discrimination against West North Homes Leeds Ltd (WN), Leeds City Council (LCC) and an employee of LCC (C). Following a government initiative to improve the efficiency of running housing operations, the Council founded a series of Arms-Length Management Organisations (ALMOs), one of which was WN. W, together with numerous other staff, transferred under TUPE from LCC to WN. LCC argued, without success, that W had no jurisdiction to bring a race discrimination claim as he was not a "contract worker" as defined under s7.

Whilst this was not a straightforward agency relationship, the Court endorsed the first instance reasoning that the legislation should be broadly constructed (see Harrods Ltd v Remick & Ors [1998] ICR 156). A purposive approach is to be taken given the aim of providing a remedy to victims of discrimination who would otherwise be without one.

Accordingly:-

(a) It is not necessary for a budding "contract worker" to establish a respondent has control or influence over the work he did.

(b) There was no need to show the primary purpose of obligation between the two contracting parties was the supply of labour. WN could not perform its obligations without employing labourers to carry out the work. As such, the supply of workers was pursuant to an obligation under that contract.

(c) Since WN was a wholly owned subsidiary with one client (LCC) everything done by WNs servants was being done not only for WN but for LCC as well.

Going forward, the tribunal is to take a pragmatic view to s7, focussing on the factual nature of the relationships between the parties rather than the written terms of service. Save in the plainest of cases, therefore, the totality of evidence should generally be considered by a fully constituted tribunal; the application of s7 should not be decided as a preliminary issue.