Harrods Ltd v Remick

Factual and Procedural Background

This opinion concerns three appeals arising from claims of race discrimination under the Race Relations Act 1976 ("the 1976 Act") involving a major department store ("Company A") and concessionaires operating within its premises. The claimants—referred to as Applicant 1, Applicant 2, and Applicant 3—were employees or prospective employees of concessionaires rather than Company A directly. The central issue was whether Company A could be held liable for alleged racial discrimination against these individuals, despite the absence of a direct employment contract between Company A and the claimants.

The Industrial Tribunals initially reached differing conclusions on jurisdiction and liability. For Applicants 1 and 2, the Tribunals held that they had jurisdiction to hear claims against Company A under section 7 of the 1976 Act. For Applicant 3, the Tribunal dismissed the claim, finding no liability on the part of Company A. The appeals concern the correct interpretation and application of section 7 of the 1976 Act, which extends protection against race discrimination to contract workers supplied under a contract to a principal.

Legal Issues Presented

1. In what circumstances is a person ("the principal") liable to a contract worker for race discrimination when there is no direct contract of employment between them?
2. Does section 7 of the Race Relations Act 1976 apply to workers employed by concessionaires operating within Company A's store?
3. Is work performed by concessionaire employees "work for" the principal (Company A) within the meaning of section 7?
4. Whether the contractual relationships between Company A and concessionaires impose obligations to supply workers such that section 7 applies?
5. Does section 32(2) of the 1976 Act impose liability on Company A as an agent of the concessionaire in the context of employment discrimination?

Arguments of the Parties

Appellant's Arguments (Company A)

• Company A argued that concessionaires, not Company A, employed the individual workers and that Company A did not have an employment relationship with them.
• Section 7 of the 1976 Act was enacted to cover temporary workers supplied by employment agencies, not concessionaire employees in a retail setting.
• The concession contracts did not impose an obligation on concessionaires to supply workers to Company A.
• The individual workers did not perform work "for" Company A but worked "in" or "at" Company A’s premises for their employer.
• Store approval requirements and controls by Company A did not transform the employment relationship or create liability under the 1976 Act.
• There was no agency relationship between Company A and the concessionaires; thus, section 32(2) did not apply.
• Company A denied liability under sections 7, 13, or 32(2) of the 1976 Act and contended that the Industrial Tribunals erred in applying section 7 to Applicants 1 and 2.

Table of Precedents Cited

Court's Reasoning and Analysis

The court began by interpreting section 7 of the 1976 Act, which extends protection against race discrimination to contract workers supplied to a principal by another employer. The court identified three essential elements for section 7 to apply: (a) a principal; (b) contract workers employed by a person other than the principal; and (c) a contract between the employer of the workers and the principal to supply those workers.

The court emphasized that "work for a person" under section 7 is broader than a traditional employer-employee relationship and includes work done for the benefit of the principal, even if the worker is employed by a third party. The focus is on the nature of the work and for whose benefit it is performed, not merely on the contractual employment relationship.

Applying these principles to the facts, the court found that for Applicants 1 and 2, the Industrial Tribunals were entitled to conclude that the work was "for" Company A. Both applicants were employed by concessionaires who had contracts with Company A, and the work was performed in Company A’s store for its benefit, with Company A exercising control via store approval and operational rules.

Accordingly, section 7 applied to Applicants 1 and 2, making Company A liable for race discrimination in relation to the work available to them.

Conversely, in Applicant 3’s case, the Industrial Tribunal erred in law by holding that section 7 did not apply. The court held that Applicant 3 was also protected under section 7, as the concessionaire had a contractual relationship with Company A, and the work was to be performed for Company A’s benefit. The Tribunal’s refusal to apply section 7 was a misdirection of law.

The court rejected the argument that Company A’s actions were protected from liability by the absence of an agency relationship or employment relationship, clarifying that the statutory protection under section 7 extends beyond direct employment or agency.

Holding and Implications

The court’s final decision was as follows:

• Applicants 1 and 2: The appeals by Company A were dismissed, affirming that the Industrial Tribunals correctly applied section 7 of the 1976 Act. Company A was liable for race discrimination in relation to these applicants.
• Applicant 3: The appeal by Applicant 3 was allowed. The Industrial Tribunal erred in law by failing to apply section 7 properly, and Applicant 3 is protected under the Act.

The decision clarifies the scope of section 7, confirming that liability for race discrimination can extend to principals benefiting from work performed by contract workers supplied under contractual arrangements, even absent a direct employment contract. No new precedent beyond the application of section 7 was established. Leave to appeal to the Court of Appeal was granted.