Kemeh v Ministry of Defence

Factual and Procedural Background

This appeal concerns two separate incidents of racial discrimination experienced by the Appellant, a black individual born in Ghana who joined the British Army in 2004 and became a British National in 2009. In June 2010, while stationed in the Falklands, the Appellant was subjected to two racially offensive comments. The first incident involved a civilian butcher, employed by Company A (Sodexo), who made a racially abusive remark implying the Appellant was not to be trusted because of his race. The second incident involved the Appellant's immediate line manager, a senior non-commissioned officer (NCO) employed by the Ministry of Defence (MoD), who called the Appellant a racially offensive name during a conversation about a football match. The Appellant initially accepted an informal resolution for the second incident but later pursued legal action upon returning to the UK.

The Appellant commenced proceedings before the Employment Tribunal against the MoD, alleging liability under the Race Relations Act 1976 for both discriminatory acts. It was accepted that the comments constituted direct racial discrimination. The MoD accepted liability for the discriminatory act of its employee (the sergeant) but denied liability for the act of the civilian butcher, arguing she was not its employee. The Employment Tribunal found the MoD liable for both incidents, but this decision was overturned on appeal by the Employment Appeal Tribunal (EAT) regarding the agency issue related to the civilian butcher. The Appellant now seeks to restore the original Employment Tribunal decision.

Legal Issues Presented

1. Whether the MoD is liable under section 32(2) of the Race Relations Act 1976 for discriminatory acts committed by a contractor's employee (the civilian butcher) on the basis that she was acting as an agent of the MoD.
2. Whether the compensation awarded by the Employment Tribunal for injury to feelings in relation to the discriminatory act by the MoD employee was excessive and should be reduced.

Arguments of the Parties

Appellant's Arguments

• The Appellant contends that the MoD is liable for the discriminatory act of the civilian butcher under section 32(2) of the Race Relations Act 1976, asserting that the Employment Tribunal correctly applied a broader concept of agency beyond the common law definition.
• The Appellant argues that the contractor's employees who perform functions integrated with the MoD's workforce and subject to its direction should be considered agents of the MoD, thus rendering the MoD liable.
• Regarding compensation, the Appellant submits that the Employment Tribunal did not misdirect itself in law and that the award of £12,000 for injury to feelings was appropriate given the circumstances and the Tribunal’s position as the fact-finder.

Respondent's (MoD's) Arguments

• The MoD denies liability for the discriminatory act of the civilian butcher, arguing that she was an employee of Company A (Sodexo) and not an agent of the MoD under the common law definition of agency as applied in Yearwood v Metropolitan Police Commissioner and subsequent cases.
• The MoD contends that the Employment Tribunal’s broad interpretation of agency is inconsistent with established legal principles and that no agency relationship existed because the contractor’s employee did not have authority to act on behalf of the MoD in relation to third parties.
• On the compensation issue, the MoD argues that the Employment Appeal Tribunal was correct to reduce the award from £12,000 to £6,000, as the original amount was manifestly excessive for a one-off discriminatory comment.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Bedfordshire Police v Liversidge [2002] ICR 1135	Distinction between common law vicarious liability and constructive liability under section 32(1) of the Race Relations Act 1976.	Used to explain the statutory imposition of liability on employers for acts of employees without requiring employer knowledge or approval.
Lana v Positive Action in Training (Housing) Limited [2001] IRLR 501	Interpretation of section 32(2) liability for principals regarding acts of agents.	Supported the view that principals are liable for discriminatory acts of agents carried out within their authorized functions, even without express authorization of the act.
Yearwood v Metropolitan Police Commissioner [2004] ICR 16560	Application of common law agency principles to section 32(2) of the Race Relations Act 1976.	Held that common law agency principles apply, and no agency relationship existed between Chief Constables and certain officers, affecting liability.
May and Baker Ltd v Okerago [2010] IRLR 394	Followed Yearwood in applying common law agency principles to discrimination claims.	Reinforced the application of common law agency in discrimination cases.
Bungay v Saini (2011) EqLR 1130	Application of agency principles under discrimination legislation.	Supported the approach in Yearwood on agency liability.
Jones v Tower Boot [1997] IRLR 168	Purposive construction of "in the course of employment" under section 32(1) of the Race Relations Act.	Encouraged a non-technical, purposive approach to statutory interpretation in discrimination cases.
Vento v Chief Constable of West Yorkshire Police [2003] ICR 318	Guidance on bands of compensation for injury to feelings in discrimination cases.	Provided the framework for assessing appropriate compensation levels for injury to feelings.
Da'Bell v NSPCC [2010] IRLR 19	Updated compensation bands for inflation in discrimination claims.	Applied updated compensation ranges relevant to the case.
Woodland v Essex County Council [2013] UKSC 66	Common law principles on liability for torts of independent contractors.	Explained limitations on liability for acts of independent contractors, relevant to agency and employment distinctions.
Mersey Docks & Harbour Board v Coggins & Griffiths (Liverpool) Ltd [1947] AC 1	Test for transfer of vicarious liability between employers.	Referenced as a stringent test for vicarious liability, highlighting its rarity and relevance to agency claims.
Various Appellants v Catholic Child Welfare Society [2012] UKSC 56	Modern approach to vicarious liability based on integration and justification.	Clarified the test for vicarious liability, distinguishing it from agency principles.
Interlink Express Parcels Ltd v Night Trunkers Ltd [2001] EWCA Civ 360	Principle that a person cannot be servant of one and agent of another in same work.	Considered in assessing the possibility of dual employment and agency relationships.
Man Nutzfahrzeuge AG v Ernst and Young [2005] EWHC 2347 (Comm)	Possibility of employee also acting as agent of another party in same transaction.	Supported the view that dual relationships are possible but require cogent evidence.
Sykes v Millington [1953] 1 QB 770	Statement on exclusivity of servant and agent roles in same work.	Referenced regarding dual roles and agency relationships.

Court's Reasoning and Analysis

The court examined the statutory language of section 32 of the Race Relations Act 1976, focusing on subsections (1) and (2) which impose liability on employers and principals respectively for discriminatory acts committed by employees and agents. The court recognized that subsection (1) imposes a form of constructive liability akin to vicarious liability, holding employers liable for acts done in the course of employment without requiring their knowledge or approval.

Regarding subsection (2), the court reviewed the Employment Appeal Tribunal's (EAT) reliance on common law agency principles in Yearwood and subsequent cases, which narrowly construe agency as requiring the agent to have authority to affect the principal's legal relations with third parties. The appellant's broader interpretation, which would impose liability whenever a contractor's employee performs functions for the principal and is subject to some control or integration, was rejected as inconsistent with the statutory language and established legal doctrine.

The court found no evidence that the civilian butcher was acting as an agent of the MoD under the common law definition of agency. Her contract with the contractor (Company A) was the source of her authority, and the limited control exercised by the MoD did not amount to authorization to act on its behalf. The court emphasized that employees of contractors are not automatically agents of the ultimate employer simply because they perform work for its benefit or under some direction.

While the court acknowledged the policy concern that the appellant might lack any remedy for the discriminatory act of the contractor's employee, it held that such considerations do not justify distorting the statutory language. The court noted a potential legislative lacuna but stated that remedying this is a matter for Parliament.

On the compensation issue, the court applied the Vento guidelines, as updated by Da'Bell, to assess the appropriate band for injury to feelings. It agreed with the EAT that the Employment Tribunal's original award of £12,000 was manifestly excessive for a single offensive comment, notwithstanding its seriousness and aggravating factors. The court emphasized the need for consistency and proportionality in awards and upheld the EAT's reduction of the award to £6,000.

Finally, the court provided detailed analysis of the common law principles of agency and vicarious liability, distinguishing them and confirming that section 32(2) adopts the common law concept of agency. It rejected the appellant’s attempt to impose a broader, non-legal definition of agency for statutory purposes and confirmed that no agency relationship existed in the case at hand.

Holding and Implications

The court DISMISSED the appeal on both grounds.

Holding: The MoD is not liable under section 32(2) of the Race Relations Act 1976 for the discriminatory act of the contractor's employee, as no agency relationship existed. Additionally, the compensation for injury to feelings awarded by the Employment Tribunal was excessive and the reduced figure of £6,000 set by the Employment Appeal Tribunal is upheld.

Implications: The decision confirms the application of common law agency principles to determine principal liability under section 32(2) and rejects broader statutory interpretations that could extend liability beyond established legal definitions. The ruling highlights a potential statutory gap in protection for discrimination victims involving contractors’ employees, which the court notes is a matter for legislative rather than judicial remedy. The judgment also reinforces the importance of consistent and proportionate awards for injury to feelings in discrimination cases, adhering to established guidelines.