Mahood v Irish Centre Housing Limited

Bad cases can sometimes teach as much as good ones. In Mahood v Irish Centre Housing Limited UKEAT/0228/10/ZT, the Employment Appeal Tribunal (EAT) had to deal with a particularly badly written decision. The case concerned the liability of an employer for the acts of a worker provided by an agency. In reaching its decision that the employer was liable, the Employment Tribunal made mistakes. It misdirected itself about the statutory defence; it failed to deal with the issue whether the company could be liable for the worker, even if he was not an employee; and it failed to set out the arguments made to it by the parties to such an extent the EAT was unable to understand why the Tribunal had reached its decision.

The Respondent was a small charity. They took on a worker provided by an agency. That worker clashed with an existing employee. The agency worker made derogatory remarks about the employee as an Irish Protestant, mimicked his accent and generally behaved in a manner the employee considered to be aggressive and intimidating.

When it intervened the management of the Charity terminated the employment of both individuals and proceedings were brought against the Charity. The Claimant won before the Employment Tribunal and the Charity appealed. The claim that was dealt with by the EAT concerned the extent to which a misbehaving worker provided by an agency can make an end user liable for alleged acts of harassment under discrimination law.

The end user could only be liable for discriminatory victimisation if the misbehaving individual was its employee or acting as its “agent”. The Employment Tribunal had failed to make a clear finding about this. Instead the claim had been dismissed, because the Tribunal had found that the Charity had complied with the statutory defence, which is that the employer had taken such steps “as were reasonably practicable to prevent the employee from doing that act”. Unfortunately the Tribunal relied on the action of the Charity in dismissing the misbehaving worker, and the defence requires action to be taken to “prevent” the misbehaviour. In other words, the employer must act before the matters complained of arose, to prevent them happening.

The law on whether worker provided by an agency will be the employee of an end user was in a state of flux a couple of years ago, but has now settled down. Employment will only be implied if it is necessary to give a business reality to what is happening. In the absence of such a necessity it is unlikely that an employment contract will be implied.

The EAT held that there was no reason to imply an employment relationship. It went on to consider whether or not there was an ‘agency’ relationship. This is, confusingly, nothing to do with the fact the worker was supplied by an Agency. It is a test to see if the acts of the worker could be laid at the door of the employer or, in other words, be said to be those of the employer.

The EAT said that the appropriate test is that an employer would be liable if the worker was controlled by the employer, and had the authority to carry out the acts in question and that the act was as capable of being carried out in a lawful manner as an unlawful manner. Only then, if an agency relationship existed, should a Tribunal consider if the employer had done sufficient (in advance) to prevent the discriminating action, in order to be able to rely on the statutory defence.

First published in The Grapevine Magazine April 2011

Further Information please contact Sejal Raja sejal.raja@rlb-law.com


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