The claimants were contract workers employed by a third party and their minimum rates of pay were set below London Living Wage. The respondent’s direct employees were office-based and had a level of pay higher than LLW. The ET found that the respondent had decided not to use the LLW as the minimum pay rate for the contract workers, in contrast to the direct employees, so they started claims of indirect race discrimination which the ET upheld.
The EAT agreed the ET had been entitled to conclude that these claims fell within s41(1) of the Equality Act, as the respondent made the decision not to pay LLW and the contractor had merely executed that decision. The ET though erred in its definition of the PCP and this had led it to adopt an indefensible pool for comparison, as the pool did not take in all outsourced workers only those on the toilet cleaning contract. That undermined the ET's decision so the appeal was allowed and the judgment set aside.