The contract worker rules

Where the company you actually do work for (known as your 'principal') is different from your 'employer', these rules impose Equality Act obligations on the principal as well as the employer. This includes the obligation to make reasonable adjustments.

Note: this page covers the Equality Act 2010 position from 1st October 2010. See also Which Act applies: Equality Act or DDA?

"EqA" or "Equality Act" means the Equality Act 2010 (link to legislation.gov.uk)

The "Employment Code"
means the 2011 Equality Act Code of Practice on employment (pdf, link to EHRC website), which came into force on 6th April, 2011. (More on EqA Codes of Practice)

Summary

The Equality Act employment provisions generally cover discrimination by your actual or prospective employer. However, often a person's employer from a legal point of view is different from the person they actually work for, the end-user, The Equality Act calls this person the "principal".

Under the contract worker rules, as well as the legal employer, the principal (the end-user) has obligations under the Equality Act not to discriminate or harass. That includes a duty to make reasonable adjustments.

Examples of where the rules can apply:

a person supplied by an employment agency, where the employment agency is legally the employer (see below where an agency only acts as agent for the end-user). The company to whom the person is supplied is also liable under the Equality Act, as the 'principal'.
the individual could also be a self-employed person who contracts with an employment business to do work personally; the company to whom he is supplied would be liable as a principal.
a person employed by one company in a corporate group who actually works for another group company (the principal);
an individual, such as an IT specialist, employed by a one-man company who does work for a client (the principal). As explained under Indirect supply of staff below, this applies even where there is an employment agency inbetween the one-man company and the client.
staff of a sub-contractor working on a building site.

Legally, the test is that there must be a person (the "principal") making work available for an individual who is employed by another person, and supplied by that other person in furtherance of a contract to which the principal is a party (whether or not that other person is a party to it): EqA s.41(5). Employment Code para 11.6 explains that the worker must work wholly or partly for the principal, even if they also work for their employer, but does not need to be under the managerial power or control of the principal.

Indirect supply of staff can be covered

The contract worker rules also apply where there is more than one person in the chain of supply between the individual and the principal, provided there is an unbroken line of contracts. Only the legal employer and the "end-user" (the principal) have the obligations under the Equality Act.

Emploment Code, para 11.7
An individual owns X company of which he is the sole employee. He has a contract for services with an employment business whereby he has to personally do the work. The employment business supplies him to Y company. Although there is no contract between X and Y companies, the employee of X company would be a contract worker and would be protected under the Act.

Reasonable adjustments

The duty to make reasonable adjustments applies to the principal (the end-user) as well as the employer (EqA s.41(4)). However, there are special provisions saying that the employer (rather than the principal) is liable for certain types of reasonable adjustment. In very broad terms:

the employer, as well as being responsible for adjustments relating to its own practices and premises etc, is also responsible for adjustments to deal with issues which will arise with all or most (or in some cases all) of the principals to which the employee is or might be supplied;
the principal (the end-user) is liable for other adjustments, relating to its own more specific practices etc

(EqA Sch 8 para 5 and 6, explained in the Employment Code from para 11.9).

In deciding what steps it is reasonable for a principal to have to take, the length of time the employee will work there is a factor. Certain steps may not be reasonable if the period is only short. (Employment Code para 11.13)

Employment Code para 11.14 says: "It would be reasonable for a principal and the employer of a contract worker to co-operate with each other with regard to any steps taken by the other to assist the contract worker. It is good practice for the principal and the employer to discuss what adjustments should be made, and who should make them."

What if the intermediary acts as an agent rather than an employer?

The contract worker provisions only apply where the intermediary is the employer of the individual. There will be other cases where the intermediary only acts as an agent or facilitator (eg a recruitment agency), so that an employment contact is formed directly between the employee and the end-user.

The employee will of course have Equality Act rights against the end-user in the normal way as his actual or prospective employer.

If the agency discriminates, the employee may have a claim against the agency under other provisions of the Equality Act such as those on employment services, or on agents or 'helping' to discriminate (see Discrimination: who is liable under the Equality Act.).

It may be unclear in a particular case (so you may need advice on) whether legally your employer is the agency or the person you actually work for.

Employment Code

For more detail on the rules, see the Employment Code, from para 11.2.

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The contract worker rules

Summary

Indirect supply of staff can be covered

Reasonable adjustments

What if the intermediary acts as an agent rather than an employer?

Employment Code

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