Abbey Life Assurance Company Ltd v Tansell

Factual and Procedural Background

The case concerns an appeal from an Employment Appeal Tribunal decision regarding the scope of protection under the Disability Discrimination Act 1995 (the 1995 Act) for "contract workers." The Respondent, a computer consultant, incorporated a company (referred to here as Company A) through which he provided consultancy services. Company A contracted with an employment agency (Company B), which in turn had a contract with the Appellant (Company C) to supply freelance IT consultants. The Respondent was referred to Company C by Company B and worked under their control, complying with Company C's work rules. The Respondent was diagnosed with diabetes, a lifelong condition, and his services with Company C were terminated. He brought a claim alleging disability discrimination against Company C. Company C denied employing or dismissing the Respondent and denied he was a "contract worker" or that Company C was a "principal" under section 12 of the 1995 Act, challenging the Employment Tribunal's jurisdiction.

Legal Issues Presented

1. Whether the Respondent qualifies as a "contract worker" within the meaning of section 12 of the Disability Discrimination Act 1995.
2. Whether the Appellant (Company C) constitutes a "principal" under section 12 of the 1995 Act in relation to the Respondent's contract work.
3. The interpretation of the requirement for a direct contractual relationship between the employer of the contract worker and the principal who makes work available.
4. Whether the protection against disability discrimination extends to individuals who supply their services through their own company via an employment agency to the principal.

Arguments of the Parties

Appellant's Arguments

• The Employment Tribunal correctly dismissed the claim against the Appellant; the Employment Appeal Tribunal erred in allowing the claim to proceed against the Appellant.
• The Respondent was not a contract worker, and the Appellant was not the principal under section 12, as there was no direct contractual relationship between the Respondent’s employer (Company A) and the Appellant.
• The contract for supplying the Respondent’s services was between Company A and Company B, not Company A and the Appellant.
• The statutory language requires a direct contract between the employer of the contract worker and the principal who makes the work available; this was absent.
• Legislative intention supports limiting protection to cases with a direct contractual link, reflecting a pragmatic balance of competing interests rather than a universal prohibition of discrimination.
• Precedents such as Mirror Group Newspapers Ltd v Gunning and Ealing Hammersmith and Hounslow FHSA v Shukla support a narrow interpretation of employment and contractual relationships.
• Reliance on an unreported Employment Appeal Tribunal decision (Lloyd v IBM) supporting the necessity of a contractual obligation to supply the worker directly to the principal.
• The Respondent’s choice to incorporate and supply services through his own company places him outside the scope of section 12 protection.

Respondent's Arguments

• The Respondent relied solely on the protection under section 12 of the 1995 Act for contract workers.
• Argued that the Appellant was the principal as it made work available and that the Respondent was employed by another person (Company A) who supplied him to the Appellant under a contract made with the Appellant (via Company B).
• Advanced an alternative submission based on section 12(3) that if the Appellant was not the principal, then Company B was, and thus both should be treated as principals.
• The alternative submission was rejected by the court on the basis that Company B did not make the work available for doing by the Respondent.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Mirror Group Newspapers Ltd v Gunning [1986] ICR 145	Limits the extension of "employment" to contracts where the dominant purpose is the regular performance of work rather than personal execution.	Used to illustrate that not all work relationships fall within the scope of discrimination legislation.
Ealing Hammersmith and Hounslow FHSA v Shukla [1993] ICR 710	Employment provisions in discrimination legislation do not apply where the work relationship is statutory rather than contractual.	Supports the argument for setting limits to the scope of statutory protection.
Duport Steels Ltd v Sirs [1980] 1 WLR 142	Judicial role in statutory interpretation: courts must give effect to plain statutory language and not legislate from the bench.	Reinforces the importance of adhering to the clear wording of section 12.
Inco Europe Ltd v First Choice Distribution [2000] 1 WLR 592	Courts must interpret statutes without appearing to legislate and respect language enacted by Parliament.	Supports the approach of construing section 12 according to its language.
Lloyd v IBM (EAT/642/94) (unreported)	Requirement of a contractual obligation between the supplier and the principal to supply the contract worker.	Cited by the Appellant to support the need for a direct contract between employer and principal; the court disagreed with its application here.
Rice v Fon-a-Car [1980] ICR 133	Proper construction of contract worker provisions requires an undertaking under a contract to supply the worker.	Referenced but found irrelevant to the facts of the present case by the court.
Jones v Tower Boot Co Ltd [1997] ICR 254	Principles supporting a generous interpretation of discrimination legislation.	Supported the court's purposive approach to section 12.
Harrods Ltd v Remick [1998] ICR 156	Also supports a broad and generous interpretation of discrimination legislation.	Used to reinforce the purposive construction of section 12.

Court's Reasoning and Analysis

The court examined the statutory language of section 12 of the Disability Discrimination Act 1995, which prohibits discrimination by a "principal" against a "contract worker" supplied under a contract made with the principal. The Employment Tribunal had held that the Respondent was not a contract worker for the Appellant but for the employment agency (Company B). The Employment Appeal Tribunal reversed this, holding that the Appellant was the principal despite the lack of a direct contract with the Respondent’s employer (Company A), as the work was made available by the Appellant and the Respondent was ultimately supplied to the Appellant through an unbroken chain of contracts.

The Appellant argued for a strict interpretation requiring a direct contract between the employer of the worker and the principal, supported by legislative intention and precedent. The court, however, favored a purposive interpretation consistent with the object of the 1995 Act to protect disabled persons from discrimination in employment, even where the supply of the worker is indirect via an agency. The court found that the statutory definition of "principal" does not explicitly require the contract to be made by the employer of the worker, only that the contract is made with the principal who makes the work available.

The court rejected the Appellant’s reliance on certain precedents and found that the alternative submission by the Respondent regarding the employment agency as principal was flawed because the agency did not make the work available. The court concluded that the Appellant was the principal within the meaning of section 12 and that the Respondent was a contract worker entitled to protection against disability discrimination.

Holding and Implications

The court DISMISSED the appeal brought by the Appellant.

The effect of the decision is that the Respondent’s claim of disability discrimination against the Appellant may proceed before the Employment Tribunal on the basis that the Appellant was the principal within the meaning of section 12 of the Disability Discrimination Act 1995. The court affirmed a purposive and broad interpretation of the statutory protection for contract workers, extending protection to individuals supplied to a principal through an agency chain, so long as the principal makes the work available and the worker is employed by another supplying person under a contract made with the principal. The decision does not establish new precedent beyond confirming the application of section 12 to such indirect supply arrangements but clarifies the scope of protection for disabled contract workers under the Act.