Understanding Indirect Discrimination: Key Legal Cases

Case 1: Indirect Discrimination Boohene and Others v. Royal Parks Ltd

In this landmark case, employees working for a contractor on an outsourced maintenance contract for Royal Parks claimed indirect race discrimination. Despite Royal Parks’ commitment to paying the London Living Wage (LLW) to its direct employees, they did not mandate the same for the contractor’s staff. The claimants, predominantly from black or minority ethnic backgrounds, argued that this constituted indirect discrimination.

Initially, the Employment Appeal Tribunal (EAT) ruled in favour of the claimants, citing Section 41 of the Equality Act 2010. This section prohibits discrimination by a principal against contract workers but does not cover remuneration issues in their contracts with contractors. The EAT argued that Royal Parks indirectly influenced the terms by choosing a contractor that did not pay the LLW.

However, the Court of Appeal overturned this decision. They concluded that contract workers supplied by a third-party contractor cannot bring a discrimination claim against the end-user under Section 41 if the issue relates to remuneration. Any such claims should be directed at the contractor, who is the actual employer. This ruling underscores the importance of understanding the commercial realities influencing a supplier’s ability to pay its workers and reinforces that claims should be properly directed at the correct party.

Case 2: TUPE Transfers Bicknell & BMA v. NHS Nottingham and Nottinghamshire Integrated Commissioning Board

Mr. Bicknell, employed by a Clinical Commissioning Group (CCG), faced employment termination when the CCG’s services were transferred to the Respondent. He argued that his employment should have been transferred under the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) and claimed automatic unfair dismissal. His union also filed claims regarding the failure to inform and consult.

The employment tribunal ruled that the transfer did not constitute a ‘relevant transfer’ under TUPE. According to TUPE, a relevant transfer occurs only when an economic entity engaged in economic activities is transferred. The tribunal, following the Employment Appeal Tribunal’s judgment in Nicholls v. London Borough of Croydon, concluded that mere commissioning does not qualify as an economic activity. The CCG did not meet the criteria to be considered an ‘economic entity.’

Although the EAT had some reservations about the Nicholls judgment, they did not find it ‘manifestly wrong’ enough to deviate from it. Consequently, all claims by Mr. Bicknell and his union were dismissed, as their claims depended on a TUPE transfer having occurred.

Case 3: National Minimum Wage & Zero Hour Contracts Taylor’s Services Ltd v. HMRC

Taylor’s Services Ltd, which employed zero-hours workers to travel to various farms for poultry services, faced a notice from HMRC for underpaying the national minimum wage (NMW). HMRC argued that the time workers spent traveling to and from farms should be compensated at the NMW rate.

Initially, the employment tribunal sided with HMRC, applying Regulations 30 and 34 of the National Minimum Wage Regulations 2015. However, the Employment Appeal Tribunal (EAT) disagreed. The EAT clarified that time spent solely on travel is not considered “time work” under Regulation 30 unless specified by Regulation 34. Regulation 34 explicitly states that travel from home to the place of work does not qualify as “time work.”

Therefore, unless actual work is performed during the travel, it cannot be classified as work under Regulation 30. The EAT overturned the employment tribunal’s decision, allowing the employer’s appeal against HMRC’s notices of NMW underpayments.

These cases highlight the complexities of employment law and the importance of correctly interpreting regulations and contractual relationships. Understanding these rulings is crucial for both employers and employees navigating similar issues.

9 July 2024