UK: outsourced workers could not claim equal pay with principal's employees

The Court of Appeal has ruled in Boohene v Royal Parks Ltd that the Equality Act does not permit a discrimination claim against a business (the 'principal') by individuals employed by a contractor to the principal in relation to their pay being lower than that of the principal's own employees.  

In this case, the principal RPL paid its own employees the London Living Wage but did not require its contractors, to whom it had outsourced various functions, to do so in respect of their staff.  Outsourced workers sought to claim indirect race discrimination against RPL on the basis that RPL had chosen to accept a non-London Living Wage tender from their employer, and they were more likely to be black or of other minority ethnic origin than RPL's own employees.

The Equality Act provides that a principal must not discriminate against a contract worker as to the terms on which the principal allows the worker to do work, but this does not cover the terms of the employment contract between the worker and their own employer (the contractor).  It is irrelevant whether the principal has some degree of control over those terms through the principal-contractor contract.  The Court ruled that complaints about contractual matters such as pay could only be brought against a worker’s own employer, and not against the client in an outsourcing relationship. 

Notably the Labour Party's New Deal (see our post here) includes a proposal to "put in place measures to ensure that outsourcing of services can no longer be used by employers to avoid paying equal pay, including for work of equal value, to women".  Although not expressly stated, the intention may be to do the same in respect of race and disability, given Labour's express commitment to extend the equal pay regime to cover those protected characteristics.