Where the company that a person actually does work for (known as their ‘principal’) is different from their ’employer’, the Equality Act 2010 (EqA) imposes non-discrimination obligations on the principal as well as the employer. This applies to agency workers, but also goes further.
The contract worker rules
The normal EqA employment provisions cover discrimination by someone’s actual or prospective employer. However, often the company an individual has their legal contract with is different from the company or organisation they actually work for, the end-user, The EqA calls this end-user the ‘principal’, and it (as well as the contractual employer) is required not to discriminate against or harass the person. This includes a duty to make reasonable adjustments.
As to the legal definition, under EqA s.41(5) a ‘principal’ is a ‘person who makes work available for’ an individual who is employed (below) by another person, and supplied by that other person in furtherance of a contract to which the principal is a party (whether or not the other person is a party to it).
For more on the technical test, see below Not limited to employment agencies. Examples of where the rules can apply:
An individual’s contract is with an employment agency. It supplies him to another company for which he actually works, but with which he has no contract. That other company is his ‘principal’ under s.41 and liable to him under the EqA if it discriminates. Also if the employment agency discriminates, the agency should be liable under the EqA as his ’employer’.
A person is employed by one company in a corporate group, but is seconded to another group company for which the person actually works. The latter group company should be a ‘principal’ liable under the EqA if it discriminates.
An individual, such as an IT specialist, is employed by his own one-man company. An employment agency contracts with the one-man company, and supplies his services to a client. The client should be a ‘principal’ liable under the EqA (unless perhaps the IT specialist is an independent business: Employees, workers and beyond).
Note: It does not matter that there are extra people in the chain between the individual’s employer and principal: see Indirect supply of staff (below).
If a company contracts out services (eg cleaning services in Antwi v Royal Parks below), it may well be a principal in relation to its contractor’s staff providing the services, particularly if it has some influence or control over the staff..
Not limited to employment agencies
S.41 EqA is clearly intended to cover supply of staff by employment agencies. But it is not limited to that. Legally, a ‘principal’ is a person who ‘makes work available for’ an individual who is ’employed’ (below) by another person, and supplied by that other person in furtherance of a contract to which the principal is a party (whether or not the other person is a party to it): EqA s.41(5). Each case is fact-sensitive (Leeds CC v Woodhouse below).
Para 11.6 of the Employment Code – doubtless based on Elmi v Harrods, below – says that the claimant must work wholly or partly for the principal, even if they also work for their employer, but the claimant does not need to be under the managerial power or control of the principal. However, it is helpful to a claimant’s case that the alleged principal (even without having managerial control) has some power or influence over them:
‘…It may well be that, if it can be shown that the principal can exercise an element of influence or control, that will be enough to bring the case within [s.41]. But that is not to say that influence or control must be demonstrated in all cases. …’
Court of Appeal in Leeds CC v Woodhouse, below, on pre-EqA legislation.
An example in the Employment Code is based on Elmi v Harrods, below (decided under pre-EqA legislation):
A worker is employed by a perfume concession based in a department store, where the store profited from any sales he made and imposed rules on the way he should behave. In these circumstances, the worker could be a contract worker. The concession would be his employer and the store would be the principal. However, this would not apply if the store simply offered floor space to the concession, the concession paid a fixed fee to the store for the right to sell its own goods in its own way and for its own profit, and concession staff in no way worked for the store.
Employment Code para 11.8.
Importance of pre-EqA case law
Nearly all case law (ie appeal court decisions) on whether someone is a contract worker was decided under pre-EqA legislation: below Technical note: Cases on pre-EqA legislation. The race discrimination legislation considered by the main two Court of Appeal decisions (Harrods and Leeds CC) was worded somewhat differently from s.41 EqA: see that link. For example, s.41 EqA says that the principal ‘makes work available for’ the claimant, whereas the pre-2010 race discrimination provision applied to ‘any work for [the principal]…’.
Even so, in deciding cases under s.41 EqA, employment tribunals (whose decisions are not binding precedents) seem to be following the pre-EqA case law. In Antwi v Royal Parks below, for example, the tribunal implied that the differing wording meant the same, asking itself ‘whether [Royal Parks] made work available for [the claimants] or, put in another way, whether the work done by them was work done for [Royal Parks]’.
One appeal decision that did consider s.41 EqA to a limited extent is Adebowale v Isban UK (bailii.org), EAT, 2015, at §47. The employment tribunal had not adequately considered the issues, and the case was sent back for further consideration. The EAT said ‘…as the Woodhouse case makes clear, any conclusion must depend on a careful evaluation of the facts.’
Two examples of employment tribunal decisions on s.41 EqA (though these are not binding precedents):
Antwi v Royal Parks (gov.uk), Employment Tribunal, 2021 (appealed on a different issue as Boohene v Royal Parks, below)
Royal Parks Ltd contracted with Vinci Construction UK Ltd (Vinci) for the latter to provide certain services, including toilet cleaning, in parks managed by it (eg Hyde Park, Regent’s Park).The tribunal held that the cleaning staff employed by Vinci were contract workers of Royal Parks within s.41 EqA, so they could bring an EqA claim against Royal Parks. The tribunal considered previous case law (§§8-14). Although influence or control by Royal Parks was not necessarily required (Leeds CC v Woodhouse, below), and Vinci managed the claimants, Royal Parks Ltd exercised a considerable degree of influence or control over the work done by the claimants. In the light of that and other findings of the tribunal, it decided that the employees of Vinci were contract workers of Royal Parks within s.41 EqA. (§§61-67)
This aspect of the tribunal decision was not appealed in Boohene v Royal Parks, below.
Ekpo v Harvey Nichols (gov.uk), Employment Tribunal, 2020
The claimant worked at a branded concession counter in Harvey Nichols. The facts were similar to the para 11.8 example above, and Elmi v Harrods below.The employment tribunal rejected an argument by Harvey Nichols that a minor change in s.41 EqA compared with previous legislation (changing ‘any work’ to just ‘work’) had reduced protection. The tribunal found that the claimant was a contract worker of Harvey Nichols within s.41 EqA.
At §§14-18 of its decision, the tribunal set out its understanding of the principles to be derived from previous case law.
(On another issue though, the tribunal found against the claimant. Many of the alleged incidents she complained of were by a security guard employed by a contractor, to which Harvey Nichols had contracted out this function. In a decision that was ‘not easy’, the tribunal concluded that the security guard was not an ‘agent’ of Harvey Nichols, so that the latter was not liable for the guard’s actions under s.109(2) EqA: see Who is liable under the Equality Act?>Agents.)
‘Employed’ by another person
The claimant need not be employed by the employment agency or other person in the sense of being able to claim unfair dismissal against it. Indeed, usually an agency worker is not employed in that sense (eg Phatty v Extraman (pdf, gov.uk), Employment Tribunal, 2023, not in itself a binding authority but discussing the case law).
However, for s.41 EqA to apply, the claimant must be ’employed’ by the agency etc in the extended EqA sense (s.83(2) EqA). This should not normally be a problem. Broadly, there must be a contract between the claimant and the agency etc (perhaps only arising on each assignment) obliging the claimant personally to do work other than as an independent business (Employees, workers and beyond>Definition of ‘worker’). The claimant need not have an obligation to accept assignments, see Camden LBC v Pegg below.
Camden LBC v Pegg (bailii.org), Employment Appeal Tribunal (EAT), 2012
The claimant worked at Camden Council as a school travel planning officer. Her contractual relationship was with an employment agency, BBT. The relevant document said that no contract existed between her and BBT between assignments, and that she was not obliged to accept any assignment which was offered to her. However, if she did accept an assignment, she must accept the direct supervision and control of any responsible person in the client’s organisation. In practice, the claimant became fully integrated with Camden Council’s team.A pre-condition of the contract worker rules applying was (as now) that the claimant was ’employed’ by BBT. The employment tribunal held that she was indeed employed by BBT within the extended meaning of what is now s.83 EqA, on the basis that she was obliged personally to do work (see Employees, workers and beyond>Definition of ‘worker’). The council argued on appeal that this was wrong, because she was not bound to accept an assignment.
The EAT agreed with the tribunal that the claimant was obliged personally to do work, and so was ’employed’ within the precursor of s.83 EqA. Once she accepted an assignment with the council, she owed express contractual duties to BBT which required her to do the work personally. Accordingly the contract worker rules applied, so the council had a duty not to discriminate against her.
Indirect supply of staff can be covered
The contract worker rules in s.41 also apply where there is more than one person/company in the chain of supply between the claimant and the principal, provided there is an unbroken line of contracts (Employment Code, para 11.8). It need not be the claimant’s employer who has a contract with the ‘principal’ (end-user) to supply the claimant’s services. However, s.41 EqA only imposes duties on the principal, not other intermediaries; and of course the claimant’s legal employer has EqA duties as the employer.
The wording of the pre-EqA legislation might be read as requiring a contract between employer and principal, but nevertheless the courts interpreted it as meaning that the employer need not be a party to the contract with the principal: below Abbey Life v Tansell. The position has now been expressly clarified by s.41 EqA, which says that the claimant must be ‘supplied by that other person [ie the employer] in furtherance of a contract to which the principal is a party (whether or not that other person [ie the employer] is a party to it)‘ [emphasis added].
Abbey Life v Tansell (bailii.org), Court of Appeal, 2000
The claimant, Mr Tansell, was a computer consultant. He offered his skills through a computing company, Intelligents, of which he was sole shareholder. He placed his name with a specialist employment agency, MHC Consulting. Abbey Life entered a Manpower Services Agreement with MHC for provision of freelance IT consultants/contractors. Abbey Life interviewed Mr Tansell, after which MHC contracted with Intelligents for the latter to (broadly) supply Mr Tansell’s services to MHC’s client Abbey Life. The effect was that Mr Tansell was under the control of Abbey Life as part of a team investigating the impact of the so-called ‘millennium bug’ on Abbey Life’s computer systems.Mr Tansell claimed disability discrimination against Abbey Life, relating to his diabetes. S.12 Disability Discrimination Act 1995, on contract workers, defined ‘principal’ as ‘a person (“A”) who makes work available for doing by individuals who are employed by another person who supplies them under a contract made with A’. Abbey Life argued that Mr Tansell was not its contract worker under s.12, because his employer was Intelligents, and there was no contract between Intelligents and Abbey Life.
The Court of Appeal held that Mr Tansell was a contract worker of Abbey Life. Intelligents, his employer, did not have to be a party to the contract with Abbey Life. S.12 DDA 1995 did not expressly stipulate who was the party who contracted with A (Abbey Life). It stipulated that the employer should supply the individual to do the work, and Intelligents did that. Also the supply of the individual had to be under a contract made with Abbey Life, and it was; the supply was under the contract between MHC and Abbey Life.
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 [EqA].
Employment Code, para 11.7
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 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).
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.
Employment Code para 11.14
Recruitment agents: intermediary acting as an agent rather than as employer
The contract worker provisions only apply where the intermediary (eg employment agency) is the employer (above) of the individual. There are other cases where the intermediary (such as a recruitment agency) only acts as an agent of the end-user or as a facilitator, so that an employment contact is formed directly between the employee and the end-user.
Here the employee will of course have EqA rights against the end-user in the normal way, as the individual’s actual or prospective employer.
If the recruitment agency discriminates, it may be liable in an employment tribunal as providing ’employment services’ (see ‘Employment services’: agencies, careers guidance, vocational training etc) – or perhaps as agents (see Who is liable under the Equality Act>Agents), or ‘helping’ to discriminate (see Instructing or causing discrimination, or helping it).
Range of discrimination covered
S.41 EqA covers the following done by the principal:
- discrimination as to the terms on which the principal allows the worker to do the work, s.41(1)(a), but see below Contractual terms
- discrimination by not allowing the worker to do, or to continue to do, the work, s.41(1)(b)
- discrimination in the way the principal affords the worker access, or by not affording the worker access, to opportunities for receiving a benefit, facility or service, s.41(1)(c)
- discrimination by subjecting the worker to any other detriment, s.41(1)(d)
- harassment, s.41(2)
- victimisation in specified ways, s.41(3)
- failure to make reasonable adjustments, s.41(4).
A contract worker can compare themselves with directly employed staff (Allonby v Accrington and Rossendale College (bailii.org) [2001] EWCA Civ 529, discussed in Boohene below), eg if contract workers are provided with an inferior canteen or washroom, compared with the principal’s own employees (§36 of Allonby).
Contractual terms
Although s.41(1)(a) EqA includes discrimination ‘as to the terms on which the principal allows the worker to do the work’, it seems that s.41 does not allow a claim against the principal as regards the terms of the individual’s contract with the employer:
Boohene v Royal Parks, [2024] EWCA Civ 583, Court of Appeal
Royal Parks Ltd contracted with Vinci Construction UK Ltd (Vinci) for the latter to provide certain services, including toilet cleaning, in parks managed by Royal Parks Ltd (eg Hyde Park, Regent’s Park). An employment tribunal decided – and it was not appealed – that the cleaning staff employed by Vinci were contract workers of Royal Parks within s.41 EqA: above Antwi v Royal Parks.The substantive claim of the Vinci employees was for indirect race discrimination. Royal Parks had invited and received alternative tenders from Vinci, priced on Vinci either paying or not paying the London living wage (london.gov.uk). Royal Parks had accepted the tender that was based on not paying the London living wage. Royal Parks’ policy was that its own employees – who were predominantly white – received the London living wage. Vinci staff on this contract – who were predominantly from ethnic minorities – argued that it was indirect race discrimination for them not to be paid this.
The view of the Employment Appeal Tribunal (EAT) was that if on a ‘real-world view’ the principal (Royal Parks) had effectively dictated the terms on which the worker was to carry out the work, the tribunal would be entitled to conclude that the case fell within s.41(1)(a).
However, the Court of Appeal held that the claim must be rejected. Very briefly, the claimants’ complaint fell outside the scope of s.41 EqA because it was concerned with rights arising from the employer-worker relationship, and not the principal-worker relationship (§72). The claim concerned a detriment which was the result of the terms of the worker’s contract of employment, rather than a detriment imposed by the principal. It would be inconsistent with the rationale of the distinction to treat the terms of that contract as falling within s.41(1), even if they could be said to be, to a greater or lesser extent, controlled by the principal. (§68, and more fully §§57-73).
The Court of Appeal said the natural reading of the phrase ‘terms on which the principal allows the worker to do the work’ in s.41(1)(a) was that it is concerned with a stipulation imposed by the principal on the worker as a condition of the latter being allowed by the principal to do the work, and not with any stipulation imposed by the principal on the employer (§66).
Note: There is more detail at 11KB: Julian Milford KC successful in Court of Appeal case concerning contract worker discrimination (pdf, 11kbw.com). Permission to appeal to the Supreme Court was refused (supremecourt.uk).
In Djalo v Secretary of State for Justice (bailii.org), 2025, the EAT held that it made no difference if the principal’s contract with the employer gave the principal the right to require the employer to pay the claimant the London living wage. There was still no claim against the principal.
Employment Code
For more detail on the rules, see the Employment Code, from para 11.2.
Technical note: Cases on pre-EqA legislation
This note supplements Not limited to employment agencies and Importance of pre-EqA case law above.
Previous legislation
Two Court of Appeal decisions under pre-2010 legislation related to the Race Relations Act 1976. In this, s.7 was the relevant precursor to s.41 EqA on contract workers, but was worded somewhat differently. S.7 Race Relations Act 1976 applied ‘to any work for a person (“the principal”) which is available for doing by individuals (“contract workers”) who are employed not by the principal himself but by another person, who supplies them under a contract made with the principal.’
Elmi v Harrods, Court of Appeal, 1997
One of the Court of Appeal decisions on s.7 was Elmi v Harrods (bailii.org), 1997 (Law Report: Harrods can be liable for racial discrimination claims (independent.co.uk), July 1997, on which the example in para 11.8 (above) of the EqA Employment Code is based.
There the Court of Appeal upheld a tribunal decision that Harrods was a ‘principal’ liable for discriminating against employees of licensees (eg cosmetics companies) in its store. These staff had to be approved by Harrods, wore Harrods uniforms, and had to observe Harrods’ rules regarding dress, deportment and behaviour. Harrods owned goods at the moment they were sold. Harrods received the gross sale price, which it would then pay to the licensee less commission.
On these facts, the Court of Appeal said it was plain that work was available to be done at Harrods by members of a licensee’s staff. Further the court had no doubt that this was ‘work for [Harrods]’. It did not matter that it was also work for the licensee (the employer). The Court of Appeal rejected the following arguments by Harrods:
- Harrods argued that to be ‘work for’ a principal (Harrods), the staff had to be under the managerial power or control of Harrods;
- Harrods argued that the work had to be made available to individuals by it, rather than just being available to be done at the store by employees of a licensee;
- Harrods argued that for the staff to be ‘supplied’ to Harrods within s.7, the supply of workers must be the primary or dominant purpose of the contract between the principal and the employer (here the licensee). Harrods argued that the primary obligation here was to market goods, not an obligation to supply labour.
The court’s rejection of the first two arguments was firstly because they they required reading words into s.7(1) that were not there, and secondly because Harrods’ proposed interpretation would leave a person in the position of these claimants without a remedy in the event of discrimination against them by the ‘principal’.
Leeds County Council v Woodhouse, Court of Appeal, 2010
Another decision under s.7 Race Relations Act 1976 was Leeds City Council v Woodhouse (bailii.org), 2010. Here the Court of Appeal rejected an argument – based on Harrods and a Northern Irish case (Jones v Friends Provident Life Office, 2003, bailii.org 1 and bailii.org 2) – that the principal had to be able to control or influence the work of the claimant. (Eg Harrods could require licensees’ staff to obey its standards of dress and conduct). In the Leeds case, the claimant was employed by a company wholly owned by the council, and whose only customer was the council. He claimed that a member of the council’s staff had discriminated against him. The Court of Appeal upheld a decision that the claimant was a contract worker of the council under s.7, supplied to it by the company. The court said that control or influence by the principal (here the council) was not necessarily required:
22. … Each case is fact-sensitive… . The authorities suggest that where the principal and the employer of the [claimant] are in the relationship of contractor and subcontractor, the mere fact that the [claimant] does work under the subcontract from which the principal will derive some benefit is not enough to bring the [claimant] within [s.7 Race Relations Act 1976]. It may well be that, if it can be shown that the principal can exercise an element of influence or control, that will be enough to bring the case within [s.7]. But that is not to say that influence or control must be demonstrated in all cases. The judge in the present case considered that, due to the extreme closeness of the relationship between the contracting parties, it could properly be said that [the claimant’s] work was being done for the council, regardless of the exercise of control or influence. In my view, control and influence are not necessary elements, and it matters not that they have not been demonstrated in the present case.
EAT decision: CJ O’Shea Construction Ltd v Bassi, 1998
In CJ O’Shea Construction Ltd v Bassi (bailii.org), 1998, the claimant, Mr Bassi was an owner-driver. He contracted with Pioneer Concrete to deliver Pioneer’s ready-mixed concrete to building sites in his vehicle. In pursuance of this contract, he made deliveries to CJ O’Shea Construction’s site where, he claimed, he suffered racial abuse and discrimination.
Mr Bassi was held to be a contract worker of CJ O’Shea Construction, within s.7 Race Relations Act 1976. Briefly, the EAT held that because Pioneer had contracted to deliver concrete by means of a vehicle, complete with a driver able to unload and deliver it, the employment tribunal was entitled to hold that Pioneer had ‘supplied’ Mr Bassi under a contract.
This decision was discussed in a later Northern Ireland Court of Appeal decision, Jones v Friends Provident Life Office, 2003. In Jones, Lord Carswell LCJ (bailii.org 1) doubted the decision in Bassi, but Nicholson LJ (bailii.org 2) did not share his reservations. Nicholson LJ thought the Bassi decision justified on the facts, as Mr Bassi was subject to O’Shea’s banksman’s instructions when he arrived on site, and the banksman was in a position to make his working conditions intolerable. See the summary of Jones in Leeds City Council v Woodhouse (bailii.org) at §§16-19.
