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Employers’ liability for discriminatory acts by contractors and awards for injury to feelings

In the recent case of Kemeh v Ministry of Defence, the Court of Appeal considered the liability of employers for acts of contractors and the appropriate injury to feelings award for one-off incidents.

Racial discrimination

Mr Kemeh was employed by the army as a cook. He is black and was born in Ghana. During his employment, Mr Kemeh was subjected to two directly discriminatory remarks about his race. The first comment was made by Mr Kemeh’s line manager (who was employed by the MoD) and the second by a butcher employed by Sodexo, a company to which the MoD had subcontracted its catering.

Equality Act 2010

Mr Kemeh subsequently issued claims under the Race Relations Act 1976 (which has now been replaced by the Equality Act 2010) in relation to both discriminatory comments. It was accepted that the abusive comments were made and that they constituted acts of direct racial discrimination. However, although the MoD accepted liability for the line manager’s comment, it denied any liability in respect of the butcher’s. This was on the basis that Mr Kemeh’s line manager was in the employment of the MoD but the butcher was not.

Discrimination law

Under discrimination law, anything done by a person as agent for another person (the principal) with the principal’s authority, is treated as being done by the principal. Therefore, an employer can be liable for discrimination by an agent of the employer, such as a contractor. However, since the agent must have actual authority for the discriminatory act, the principal’s liability is not as wide as an employer’s liability for the acts of its employees (which require no authority or even knowledge on the part of the employer).

Employment Tribunal

The Employment Tribunal found the MoD liable for the butcher’s comment as an agent. This decision was overturned on appeal by the Employment Appeals Tribunal, which held that there was no evidence that the butcher or Sodexo were agents of the MoD. The butcher had acted as an employee of Sodexo, not as an agent of the MoD.

Mr Kemeh appealed to the Court of Appeal. However, it rejected the appeal and upheld the EAT’s decision, and held that it would not normally be appropriate to label such individuals as agents of the ultimate employer. To be accurately described as such, they would require a degree of authorisation beyond the carrying out of work: there would need to be “very cogent evidence” showing the tasks that person carried out as an employee were also being performed as an agent.

Injury to feelings

Mr Kemeh was awarded £12,000 by the tribunal for injury to feelings in respect of his line manager’s comments. The MoD appealed to the EAT on the grounds that this figure was outside the legitimate band open to the tribunal. The EAT agreed and substituted a figure of £6,000. Mr Kemeh appealed to the Court of Appeal, arguing that the figure of £12,000 should stand.

The starting point for determining compensation for injured feelings in discrimination cases is the guidance set out in Vento v Chief Constable of West Yorkshire Police, where three broad bands of compensation for injury to feelings were identified.  The bands are currently:

  • £18,000 – £30,000 for the most serious cases, e.g. where there has been a lengthy campaign of discriminatory harassment;
  • £6,000 – £18,000 for serious cases that do not merit an award in the highest band;
  • £500 – £6,000 for less serious cases, e.g. where the act of discrimination is an isolated or one-off occurrence.

There is considerable flexibility within each band to allow tribunals to award fair, reasonable and just compensation in the particular circumstances of the case. The aim is to compensate for genuinely injured feelings, not to punish an employer for bad management or poor personnel practice.

Direct discrimination

In this case, the MoD had always admitted that the comment was made and that it constituted direct discrimination. The line manager also apologised at the time, although Mr Kemeh’s evidence was that this was not as remorseful as it should have been and came only after a more senior officer intervened. However, appropriate action had not been taken to investigate the allegations properly, which would have exacerbated the injury to feelings.

Court of Appeal

The Court of Appeal upheld the EAT’s reduced award of £6,000. Although each case is fact-specific, they could see no justification here for a one-off incident of this nature being placed within the middle category.

This case creates a potentially peculiar situation whereby an employer could be liable to an agent or contractor who claims to have suffered discriminatory treatment by one of the employer’s employees, but an employee cannot necessarily hold the employer liable for the contractor’s conduct (although the employee might be able to pursue a claim against the contractor in the County Court).

Employers should carefully consider the contracts and working arrangements they have with sub-contractors or anyone else who comes into the workforce.

Anti-discrimination policy

Clear anti-discrimination policies should be in place and training should be provided to all employees. In particular, managers and those who deal with grievances should be trained on how to handle grievance processes and how best to deal with allegations of discrimination. All allegations should be investigated thoroughly and employees should be dealt with sensitively. Where an allegation is upheld, employers should give careful consideration to what action is appropriate and whether an apology is required.

For more information on any of the issues raised in this article, to discuss how the issues might affect your business or to discuss employment law matters in general, please contact us on 0117 904 6000.

Posted on Feb 27th, 2014 by Lyons Davidson