MHC Consulting Services Ltd v Tansell

For the purposes of section 12 of the Disability Discrimination Act 1995, an end user may be a principal even where an intermediary stands between it and the company employing the worker. The definition does not require the worker’s employer to be the party that made the contract with the principal. It is enough that the principal made work available, the individual was employed by another person, and that employer supplied the individual under a contract made with the principal by an intermediary. The provision should be construed purposively where the statutory language can bear that meaning, but courts cannot rewrite clear words. An intermediary is not a principal merely because it is part of the supply chain; the work must have been made available by it.

Mr Tansell, a computer consultant and employee of Intelligents Ltd, was supplied to Abbey Life through MHC Consulting Services Ltd. Intelligents contracted with MHC, while MHC had contracted with Abbey Life. Abbey Life controlled the work, which ended after Mr Tansell was diagnosed with diabetes.

The Employment Tribunal held that Mr Tansell was not Abbey Life’s employee or contract worker, but was a contract worker for MHC. The Employment Appeal Tribunal allowed MHC’s appeal and Mr Tansell’s cross-appeal, holding that the unbroken contractual chain made Abbey Life the principal: [1999] ICR 1211. The central issue before the Court of Appeal was whether section 12 required a direct contract between the worker’s employer and the end user, and whether section 12(3) made MHC a principal.

The appeal was dismissed unanimously. Lord Justice Mummery gave the judgment, with Lord Justices Ward and Stuart-Smith agreeing. The Employment Appeal Tribunal was affirmed, and Mr Tansell’s claim could proceed against Abbey Life as principal.

1. Meaning of principal and contract worker. Section 12 of the Disability Discrimination Act 1995 covers both the standard agency arrangement and a less common arrangement involving an additional intermediary. The relevant questions are whether the end user made work available, whether the individual was employed by another person, and whether that employer supplied the individual to the end user under a contract made with the end user.
2. No direct contractual link required. The statutory definition does not stipulate that the worker’s employer must itself be the party contracting with the principal. The contract with the principal may be made by an intermediary. Intelligents supplied Mr Tansell, and the MHC contract was made with Abbey Life. That was sufficient to make Abbey Life the principal.
3. Purposive construction. The statutory language was reasonably capable of covering the intermediary arrangement. That interpretation better served the protective object of the discrimination legislation. The court remained within conventional statutory construction and could not invent ambiguity or legislate merely because another result appeared undesirable. Mirror Group Newspapers Ltd v Gunning and Ealing Hammersmith and Hounslow FHSA v Shukla were accepted as reminders of the limits of purposive interpretation. Lloyd v IBM was wrongly decided, while Rice v Fon-a-Car was irrelevant to the direct-contract issue. The generous approach to discrimination legislation was supported by Jones v Tower Boot Co Ltd and Harrods Ltd v Remick.
4. Section 12(3). MHC was not a principal because it had not made the work available for doing by Mr Tansell. The deeming provision could not alter that statutory requirement.

Order: appeal dismissed, with no order as to costs.

1. Court of Appeal dismissed Abbey Life’s appeal, affirmed the Employment Appeal Tribunal, and allowed the claim to proceed against Abbey Life as principal.
2. Employment Appeal Tribunal allowed MHC’s appeal and Mr Tansell’s cross-appeal, reversing the Employment Tribunal’s conclusion that Abbey Life was not the principal: [1999] ICR 1211.
3. Employment Tribunal held that Mr Tansell was not Abbey Life’s employee or contract worker, but was a contract worker for MHC.