Introduction

The case of May & Baker Ltd (t/a Sanofi-Aventis Pharma) v. Okerago ([2010] UKEAT 0278_09_1702) represents a significant precedent in employment law, particularly concerning vicarious liability and race discrimination under the Race Relations Act 1976. The Employment Appeal Tribunal (EAT) reviewed the decision of an Employment Tribunal (ET) which had found May & Baker Ltd liable for direct racial discrimination and victimization against the claimant, Ms. Okerago.

The central issue on appeal was the ET's determination that May & Baker Ltd was liable for direct race discrimination based on the actions of Terri Dower, an agency worker. The claimant alleged that Dower's racist remarks and the company's subsequent handling of the grievance constituted direct discrimination, victimization, and unfair dismissal.

Summary of the Judgment

The Employment Tribunal initially found in favor of Ms. Okerago's claims of direct discrimination, victimization, and unfair dismissal. Specifically, the Tribunal concluded that an incident involving Terri Dower's racist remarks against Ms. Okerago amounted to direct racial discrimination and that the company's response to the grievance was inadequate, leading to victimization.

May & Baker Ltd appealed the decision, challenging the Tribunal's findings on several grounds, including the interpretation of May & Baker's liability under sections 32 and 33 of the Race Relations Act 1976. The EAT ultimately set aside the Tribunal's findings of direct discrimination, highlighting errors in legal reasoning regarding the company's vicarious liability for the actions of an agency worker.

Analysis

Precedents Cited

The judgment extensively references key precedents that shaped the court’s approach:

• Mirror Group Newspapers v Gunning [1986] IRLR 27: Addressed employer liability for third-party discrimination.
• Macdonald v Ministry of Defence and Pearce v The Governing Body of Mayfield Secondary School [2003] ICR 512: Clarified employer responsibilities under race discrimination law.
• Anyanwu and others v South Bank Student Union [2001] IRLR 305 HL: Defined the interpretation of "aids" in the context of unlawfully assisting another.
• Hallam v Avery [2001] IRLR 312: Established criteria for liability under section 33 of the Race Relations Act.
• Sinclair Roche and Temperley v Heard (No. 1) [2004] IRLR 763: Emphasized the necessity of proving knowledge in aiding unlawful acts.
• Pearce v Governing Body of Mayfield Secondary School [2003] ICR 937: Disapproved earlier propositions regarding employer liability for third-party discriminatory actions.

Legal Reasoning

The EAT scrutinized the ET’s application of sections 32 and 33 of the Race Relations Act 1976. The primary legal contention revolved around whether May & Baker Ltd could be held vicariously liable for the actions of Terri Dower, an agency worker, under these sections.

Key points of legal reasoning include:

• Definition of Employment: Under section 78(1) of the Race Relations Act, employment is defined strictly. The EAT found that Terri Dower was not an employee but an agency worker, thus negating vicarious liability.
• Aiding Unlawful Acts: Section 33 requires that the aiding party has knowledge of the unlawful act at the time it occurs. The EAT determined that May & Baker Ltd did not have such knowledge during the incident.
• Vicarious Liability: The EAT emphasized that vicarious liability is grounded in statutory provisions, not common law, and in this case, the statutory criteria were not met.
• Evidence and Findings: The EAT highlighted the lack of concrete evidence and proper factual findings supporting the Tribunal’s conclusion that May & Baker Ltd treated Ms. Dower as an employee.

Impact

This judgment has profound implications for future cases involving vicarious liability in discrimination claims. It clarifies the boundaries of employer liability, particularly distinguishing between employees and agency workers. Employers must exercise due diligence in establishing the nature of their workforce relationships to mitigate potential liabilities.

Furthermore, the decision underscores the necessity for tribunals to meticulously apply statutory definitions and ensure that factual findings robustly support legal conclusions. This ensures fairness and accuracy in adjudicating discrimination claims.

Complex Concepts Simplified

Vicarious Liability

Definition: Vicarious liability is a legal principle where an employer is held responsible for the actions of their employees performed within the scope of employment.

Application in this Case: The Employer attempted to hold May & Baker Ltd liable for the discriminatory remarks made by Terri Dower, an agency worker. However, the EAT clarified that agency workers do not automatically fall under the employer's vicarious liability unless specific conditions are met.

Aiding Unlawful Acts (Section 33)

Definition: Section 33 of the Race Relations Act 1976 states that a person who knowingly aids another in committing an unlawful act shall be treated as if they themselves committed that act.

Key Elements:

• The act must be unlawful under the Race Relations Act.
• The aiding party must have knowledge of the act.
• The aiding must occur contemporaneously with the unlawful act.

In this case, the EAT found that May & Baker Ltd did not aid the unlawful act of Terri Dower as they lacked the necessary knowledge at the time of the incident.

Employment vs. Agency Worker

Definition: An employee is typically someone on a company's payroll with a contract of service, whereas an agency worker is employed by an agency that supplies workers to client companies.

Relevance: The status determines liability. Employees can make their employers vicariously liable for their actions, while agency workers generally do not, unless specific criteria under the law are satisfied.

Conclusion

The EAT's decision in May & Baker Ltd v. Okerago serves as a crucial reminder of the stringent criteria required to establish vicarious liability in discrimination cases. By dissecting the nuances between employees and agency workers and emphasizing the necessity for clear evidence of knowledge and aiding in unlawful acts, the judgment ensures that employers are not unjustly held liable for third-party actions without concrete legal grounds.

This case reinforces the importance for employers to clearly define their workforce structures and for tribunals to adhere strictly to statutory definitions and evidence-based findings. As a result, it sets a high standard for future discrimination claims, promoting fairness and legal precision in employment law.