Kelly v Northern Ireland Housing Executive (Loughran v Northern Ireland Housing Executive)

A contract is one personally to execute work or labour where its dominant purpose is to secure the contracting party’s personal performance of the essential work. Assistance or delegation of ancillary tasks does not prevent that conclusion.

A partner who is a contracting party and is designated to carry out the work may invoke the employment discrimination provisions. An appointment to perform remunerated professional work for a client is not a qualification merely because it is prestigious or recognises professional experience.

The Northern Ireland Housing Executive invited solicitors’ firms to compete for appointment to a panel handling public liability claims. Oliver Loughran, a sole practitioner, and Bernadette Kelly, a partner designated to undertake the work for her firm, were unsuccessful. Each alleged religious or political discrimination under sections 17 and 23 of the Fair Employment (Northern Ireland) Act 1976.

The Fair Employment Tribunal rejected both complaints on preliminary jurisdictional grounds. The Court of Appeal held that Mr Loughran could proceed under section 17 but that Mrs Kelly could not. It agreed that neither applicant could rely on section 23. The conjoined appeals concerned whether the proposed retainers were contracts personally to execute work and whether panel membership was a qualification.

1. Disposition. By a majority of three to two, the House dismissed the Executive’s appeal concerning Mr Loughran and allowed Mrs Kelly’s appeal under section 17 of the Fair Employment (Northern Ireland) Act 1976. The rejection of both claims under section 23 was unanimous.

2. Personal execution of work. Lord Slynn of Hadley delivered the leading speech, with which Lord Steyn agreed. The extended definition of employment covered professional services supplied otherwise than under a contract of service. A contract could be one personally to execute work even though secretarial or other ancillary tasks were delegated. The question was whether its dominant purpose required the contracting party to perform the essential work.

   Mr Loughran was the sole contracting principal, was designated as mainly responsible for the panel work and would be legally responsible for its performance. His proposed retainer therefore fell within section 57. Lord Griffiths reached the same conclusion because the Executive’s dominant purpose was to secure the services of the identified solicitor personally.

3. The partnership application. Lord Slynn, with Lord Steyn agreeing, considered that the statutory reference to a person could extend to an unincorporated firm. A firm could undertake personally to provide professional services through one or more partners. Mrs Kelly could complain individually because the application depended upon her experience and her acceptance of responsibility for the work.

   Lord Griffiths reached the same result on a narrower ground. A solicitors’ firm had no legal existence separate from its partners, so Mrs Kelly was herself a contracting party who undertook personally to execute the work. He did not accept that the Interpretation Act 1978 extended the protection to companies or unincorporated corporations.

4. Qualification. Lord Slynn held that appointment of an already qualified professional to perform remunerated work for a client was not the conferral of a qualification under section 23. Prestige, approval or enhanced status resulting from an appointment did not convert the retainer into an authorisation, recognition or qualification facilitating entry into employment. The other Law Lords agreed with the rejection of the section 23 claims.

5. Dissents on section 17. Lord Lloyd of Berwick and Lord Clyde would have restored the Tribunal’s decision on both section 17 complaints. In their view, the proposed contract was with a business enterprise, while the designated solicitor’s personal performance was fortuitous rather than the dominant purpose of the appointment.

1. House of Lords: In [1998] UKHL 33, dismissed the Executive’s appeal concerning Mr Loughran and allowed Mrs Kelly’s appeal under section 17. It upheld the rejection of both section 23 claims.
2. Court of Appeal in Northern Ireland: On 22 May 1997, allowed Mr Loughran’s appeal under section 17 because he was a sole practitioner, dismissed Mrs Kelly’s section 17 appeal because the applicant was her partnership, and rejected both section 23 claims.
3. Fair Employment Tribunal: On 18 April 1996, held that neither applicant had established an employment relationship within section 17 or the refusal of a qualification within section 23, and rejected both applications.