F Djalo v Secretary of State for Justice

The Employment Appeal Tribunal dismissed the claimant’s appeal from an Employment Tribunal order striking out her indirect race discrimination claim. The claimant, an OCS cleaner contract worker at the Ministry of Justice site, sought to compare her pay with the respondent’s directly employed staff and relied on clause 60.1(17) of the FM Contract and the single source principle (as identified in Lawrence) and on the Race Directive to bring her claim within section 41 and/or section 19 Equality Act 2010. The EAT held, following the Court of Appeal’s decision in The Royal Parks Ltd v Boohene, that section 41 does not cover complaints about remuneration payable under the worker’s contract with the supplier and that there was no realistic prospect of establishing that clause 60.1(17) conferred a contractual power on the respondent to impose the London Living Wage. The tribunal’s rejection of the disparate‑terms formulation of the PCP and the absence of a PCP applied to the claimant by the respondent under section 19 were also upheld. An Article 14 ECHR challenge was considered and rejected.

The claimant is employed by OCS and worked as a cleaner at 102 Petty France. She alleged indirect race discrimination because contract workers at that site were paid less than the respondent’s directly employed staff, who received higher rates (including London Living Wage at some sites). The claim alleged the respondent had contractual power under clause 60.1(17) of the FM Contract to require OCS to uplift pay and that the respondent applied PCPs which produced a group disadvantage affecting BME workers.

The Employment Tribunal struck out the claim as having no reasonable prospects of success, concluding that sections 19 and 41 Equality Act 2010 did not protect a contract worker in relation to differences between her pay and that of the principal’s employees and that clause 60.1(17) did not confer on the principal a power to impose the London Living Wage.

On appeal to the EAT the claimant relied on the Race Directive and on the single source principle from Lawrence, arguing that Royal Parks was distinguishable because the FM Contract conferred an arguable contractual entitlement on the respondent to uplift pay. The claimant also sought to argue an Article 14 ECHR incompatibility (read with Article 8 and/or Article 1 Protocol 1) of the Court of Appeal’s construction in Royal Parks.

The EAT (Williams J) summarised the legal framework (strike out jurisprudence, sections 19, 23 and 41 EqA, the Race Directive and the single source test from Lawrence and its post‑Lawrence development). The court concluded: (i) Royal Parks is binding and correctly treats s.41 as directed at detriments within the principal‑worker relationship, not contractual terms under the supplier‑worker contract; (ii) even if clause 60.1(17) were construed in the claimant’s favour, Underhill LJ’s analysis in Royal Parks indicates no material distinction; (iii) clause 60.1(17) in any event unarguably refers to Government introduction of a compulsory living wage as a compensation event, not to a contractual power of the client to impose the London Living Wage on the contractor; (iv) the pleaded Disparity PCP was not a proper single PCP for s.19 purposes and the Access PCP, though arguably better framed, was not shown to have been applied by the respondent to the claimant; and (v) the Article 14 challenge failed because there was no material mismatch with the equal pay/single source regime, the circumstances did not fall within the ambit of Article 8 or A1P1 for the claimant’s purposes, and the package principle also defeated the attack.

The EAT therefore dismissed the appeal. The tribunal’s strike out was held to be appropriate because the claim had no realistic prospect of success on the legal and contractual issues and the indirect discrimination ingredients could not be established on the pleaded case.

Appeal dismissed. The EAT followed the Court of Appeal in Royal Parks: section 41 Equality Act 2010 is concerned with detriments arising from the principal‑worker relationship and does not encompass complaints about remuneration payable under the worker’s contract with the supplier. Clause 60.1(17) of the FM Contract, properly construed, identifies a Government introduction of a compulsory living wage as a compensation event and does not confer on the principal a contractual power to impose the London Living Wage on the contractor. The pleaded PCPs under section 19 either did not properly identify a single PCP or were not shown to have been applied by the respondent to the claimant. The Article 14 ECHR challenge was rejected.

Appeal from the Central London Employment Tribunal (strike out order dated 26 October 2022). Permission for Grounds 1–9 was granted by HHJ Auerbach (order sealed 7 March 2024); permission to add Ground 10 (Article 14 point) was granted by John Bowers KC (order sealed 8 October 2024). The Court of Appeal decision in The Royal Parks Ltd v Boohene and others [2024] EWCA Civ 583, [2024] IRLR 668 was treated as binding and determinative of the scope of section 41 in this appeal.