In Kemeh -and- Ministry of Defence (2014) 27 January, CA, the Court of Appeal has identified a gap in the protection provided by discrimination legislation, arising from the application of the common law concept of agency in statutory interpretation.

The facts

The Claimant, K, was employed by the MoD as a cook. In 2010 he was subjected to race discrimination by a civilian cook, A. Although they were working together she was employed by a sub-contractor, S, who provided services to the MoD. K presented a claim of race discrimination against the MoD.

The arguments

The MoD denied any liability for the act of A since she was not in its employment. K submitted that it was liable nonetheless on the grounds that she was its agent, and the MoD was liable for her discriminatory act as her principal pursuant to section 32(2) of the Race Relations Act 1976. Section 32(2) provides: “Anything done by a person as agent for another person with the authority (whether express or implied, and whether precedent or subsequent) of that other person shall be treated for the purposes of this Act as done by that other person as well as by him.” (The Equality Act 2010 has a related but differently worded provision at section 109(2): “Anything done by an agent for a principal, with the authority of the principal, must be treated as also done by the principal.”)

The Employment Tribunal accepted K’s submission that A was the MOD’s agent, but its decision was overturned on appeal by the EAT. The Court of Appeal held that the EAT was correct.

Reasoning

The EAT had followed the line of authority from Yearwood v Metropolitan Police Commissioner [2004] ICR 1660, that common law agency principles are to be applied when construing section 32(2). As noted by the EAT, at common law agency refers to a situation in which one person, the agent, may directly affect the legal relations of another, the principal, as regards third parties, by acts which he is said to have the principal’s authority to perform on his behalf. The EAT held that it could not be said A was an agent of the MoD in the relevant sense.

Before the Court of Appeal K’s counsel submitted that a different and broader definition of agency must have been intended by Parliament. Elias LJ held however that It is not permissible to expand the meaning of a statutory concept beyond its legitimate reach because it is thought that the broad objective of the statute would be better effected thereby.” The court could readily accept that a broader meaning should be adopted where two constructions are equally plausible, and the broader meaning better achieves the statutory purpose. But that did not apply here. There was no readily available, consistently understood broader meaning of ‘agency’ in the public domain which Parliament can reasonably be taken to have intended.

It could not be appropriate to describe as an agent someone who is employed by a contractor, simply on the grounds that she performs work for the benefit of a third party employer. She is no more acting on behalf of that third party than its own employees are – and they would not typically be treated as agents. (This was not to say that employees can never be agents; they might well be, depending upon the obligations upon them, such as where a senior manager is authorised to contract with third parties. She will be an employee but will also act as an agent when exercising the authority to deal with third parties.)

Conclusions

The Court of Appeal recognised that this meant there was a lacuna in the discrimination legislation. If K could not bring a claim against the MoD there was a real risk that he had no remedy at all for A’s discriminatory act. Her employer S was not liable because although they would in principle be responsible under section 32(1) for her acts, K could only bring proceedings if he were in their employment. Increasing numbers of individuals, in both public and private sectors, are working alongside colleagues who are engaged by third party contractors. In these circumstances the chances of similar claims being made must be increasing.

It remains to be seen whether the one alternative identified by the Court of Appeal – a claim against S as a service provider under Part 3 of the Equality Act 2010 – might provide a viable avenue for redress, or whether Parliament will legislate to fill the gap.