London Underground Ltd v Amissah & Ors

This Court held that regulation 5(1) of the Agency Workers Regulations 2010 creates a substantive entitlement to equalised terms and in the context of pay this means a right to be paid the equalised rate. Regulation 14 allocates liability between the temporary work agency and the hirer according to the extent of their responsibility, and regulation 18 provides for compensation assessed as just and equitable having regard to the loss attributable to the infringement. The Employment Tribunal had found LUL fifty per cent liable under regulation 14; the Court of Appeal confirmed that the appropriate measure of compensation is the pound-for-pound shortfall (the underpayments) and that LUL remains liable for 50% of that assessed compensation. The appeal by LUL was dismissed and the case was remitted to the Employment Tribunal for assessment of the amounts payable, limited to calculation of arrears, 50% of which will be payable by LUL.

Background and facts:

• The claimants were agency workers supplied by Trainpeople.co.uk Ltd (TP) to London Underground Ltd (LUL) at a group of stations. TP initially treated the Swedish derogation as applying, so it did not equalise pay. LUL later accepted the Regulations applied and funded TP to pay equalised rates, but TP did not pay earlier arrears and later went into involuntary liquidation.
• The claimants brought proceedings under the Agency Workers Regulations 2010, principally for equalisation of pay under regulation 5(1). Proceedings were heard first in the Employment Tribunal (ET); liability was apportioned 50% to LUL. The ET later declined to award compensation against LUL on the ground that the loss was not attributable to LUL's breach but to TP's dishonesty and the claimants' failure to enforce their rights before TP's insolvency.
• The Employment Appeal Tribunal allowed the claimants' appeal and remitted the matter for assessment. LUL appealed to the Court of Appeal.

The claimants sought compensation under regulation 18(8)(b) of the Regulations for breaches of regulation 5(1) (equal pay) by the temporary work agency and the hirer.

Issues framed by the court:

• Whether regulation 5(1) creates a substantive right to equalised benefits (in particular pay) enforceable under the Regulations.
• How liability is allocated between the agency and the hirer under regulation 14.
• How compensation is to be assessed under regulation 18(8)(b), (9) and (10) and whether subsequent events (TP's retention of funds and insolvency; claimants' failure to enforce) break causation or otherwise reduce LUL's liability.

Court’s reasoning on those issues:

• The Court concluded that regulation 5(1) gives agency workers a substantive entitlement to the equalised terms and conditions and that non-payment of equalised pay constitutes an infringement for which compensation under regulation 18 is the available pecuniary remedy.
• Regulation 14 requires apportionment of liability between agency and hirer according to the extent of each party's responsibility; the ET had reasonably apportioned 50% to LUL and that finding was not appealed.
• Compensation under regulation 18(10) should normally reflect the pecuniary loss caused by the infringement and, in the case of pay, is the amount of the underpayments. Subsequent dishonest conduct by the agency and its liquidation do not sever the link between the original underpayment and the loss recoverable under the Regulations. It follows that the claimants are entitled to compensation equal to the underpayments, and regulation 18(9) does not justify departing from the ET's 50% apportionment except in truly exceptional cases of claimant misconduct, which were not present here.

Procedural outcome: the Court dismissed LUL's appeal and remitted the case to the Employment Tribunal for assessment of the quantum of the underpayments, with LUL liable for 50% of the compensation assessed.

Appeal dismissed. The Court held that regulation 5(1) of the Agency Workers Regulations 2010 creates a substantive entitlement to equalised terms, including pay, and that non-payment gives rise to compensation under regulation 18. Liability is apportioned under regulation 14; the unappealed ET finding that LUL was 50% responsible stands and LUL must pay 50% of the compensation which the ET will assess as the underpayments. The ET’s reasoning that the loss was not attributable to the infringement because of TP’s dishonesty and the claimants’ failure to enforce was incorrect.

Employment Tribunal (Employment Judge Snelson): liability judgment 27 March 2015 finding breaches of reg 5 and apportioning liability 50% to LUL; further remedy hearing (14-15 October 2015) Reasons issued 13 January 2016 declining to award compensation against LUL. Employment Appeal Tribunal (Mitting J): 13 December 2016 allowed claimants' appeal and remitted to ET for assessment of compensation. Court of Appeal: [2019] EWCA Civ 125, 19 February 2019, dismissed LUL's appeal and remitted for quantification with LUL liable for 50% of assessed compensation.