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Employment Law

Legal guidance - compliance - software

26 APR 2012

Employee, worker or neither?

By James Goudie QC

In the context of agency relationships, was Ms Corrie Pegg an employee of an employment agency ("EA"), a worker for a local authority ("LA"), or neither?  This was the preliminary jurisdictional issue that arose in Camden LBC v Pegg, UKEAT/0590/11/LA, a disability discrimination claim.

Ms Pegg is a specialist in the transport field and particularly in school travel planning. She was on the books of EA.  EA put her forward when LA sought to recruit a temporary School Travel Planning Officer.  The LA interviewed her, and offered here the role of Senior School Travel Planning Officer, which she accepted.  While she worked for LA Ms Pegg was under contract to, and was paid by EA, under terms and conditions described as a contract for services between EA and a temporary worker.  However, she was fully integrated with, and was held out as fully integrated with, other members of staff at the LA as part of a team in the LA's organisation which included both employees and other agency staff.  She could not choose her hours.  She could not field a substitute. 

The EAT upheld the ET's decisions that during the relevant period Ms Pegg was employed by EA, within the extended meaning of s68(1) of the Disability Discrimination Act 1995 ("the DDA"), employment includes a contract "personally to do any work", and was supplied by EA to work for LA as a contract worker in circumstances where LA was the "principal" within the meaning of s4B of the DDA, which makes it unlawful for a "principal", in relation to contract work (as defined), to discriminate against a person who is a "disabled contract worker", or to subject such a worker to harassment, and subsection (9) of which defines "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", and defines "contract worker" as any individual who is supplied to the principal under such a contract.

As the EAT observed, these provisions closely followed provisions in other discrimination legislation, and they, like that other legislation, have now been repealed and replaced by provisions, especially Sections 41 and 83, in the Equality Act 2010.

The LA's case on appeal was that Ms Pegg was not party to a contract "personally to do any work", because she was not bound to accept any assignment, and it was not sufficient that she was subject to an obligation personally to do work if she chose to accept an assignment. Distinguishing the Court of Appeal's decision in Mingeley v Pinnock [2004] ICR 727, this argument was rejected.  The EAT found that the contractual arrangements were different, and ruled that once Ms Pegg accepted the assignment with the LA she owed express contractual duties to the EA which required her to do the work personally and that was sufficient to bring her within s68 and thereby within s4B.  The EAT could see no warrant in the wording of s68 for excluding Ms Pegg from its provision merely because she was not bound to accept the assignment.  The critical point in the view of the EAT was that when she accepted the assignment with the LA she owed a contractual duty to the EA to do the work for the LA personally.  To the EAT it was plain that Ms Pegg was under an obligation to do work personally, whether or not the absence of a power of substitution were taken into account.

The EAT stated that the arrangements under which Ms Pegg came to work for the LA are common arrangements, and that there was no doubt that Parliament intended the protection for contract workers to apply to such workers.


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