Case finds council is liable for ALMO staff


24 September, 2008

An Employment Tribunal has found that Leeds City Council was vicariously liable for the actions of its arm's-length management organisation (AMLO) after one of its employees claimed racial discrimination.

Mr Woodhouse had originally been an employee of Leeds City Council. The council then set up 6 ALMOs resulting in Mr Woodhouse's employment transferring to one of them. He was now an employee of West North West Homes and whilst employed by them, alleged that he was racially abused by the council's clerk of works.

Mr Woodhouse claimed not only against the person who made the alleged racist remark and the ALMO, but also against Leeds City Council. An application was made by the council to be excluded from the case but this was rejected at the Employment Tribunal by Judge Humphrey Forrest who remarked that 'ALMO employees are treated on the same basis as employees of Leeds City Council staff'.

This case highlights the increased exposure of local authorities to vicarious liability claims and demonstrates how they should be aware that discriminatory acts in respect of an employee's race, sex, disability, sexual orientation, and religion or belief committed by their own employees could have repercussions for them, which can extend beyond their own organisation.

Under discrimination legislation, discriminatory acts committed by an employee "in the course of employment" are treated as having been done by the employer. An employer would not be liable however if it can show that it took such steps as were reasonably practicable to prevent the employee from doing the discriminatory act.

Peter Byrne of Forbes Solicitors advises that the relative closeness of the relationship between local authorities and the employees of other organisations is the usual starting point for determining whether an employer would be vicariously liable for the actions or omissions of that employee. If the local authority has control over the way in which its contractor's employees work then they may well find themselves vicariously liable for their actions. Raising awareness of theses issues and ongoing training of employees in relation to dignity at work is therefore paramount.


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