Religious discrimination in employment? – only if you’re employed: Halawi v WDFG UK Ltd

We have previously noted the case of Mrs Nohad Halawi, a Christian who had been working as a beauty consultant airside at Heathrow Airport. Yesterday, in Halawi v WDFG UK Ltd (t/a World Duty Free) [2014] EWCA Civ 1387, the Court of Appeal  (Arden and Christopher Clarke LJJ and Barling J) handed down judgment in her appeal from the finding of the EAT in Halawi v WDFG UK Ltd (t/a World Duty Free) & Anor [2013] UKEAT 0166 13 0410 that she was not in an enforceable employment relationship with World Duty Free. The issue before the Court, as stated by Arden LJ, was whether a person who provided services through an employee-controlled company to a service company had employment rights. Mrs Halawi sought to establish that, on the particular facts of the case, she was an employee of WDFG UK Ltd, which managed the workplace for the client for whom her services were engaged [1]. The Court held that she was not.

The facts

WDF operates retail outlets at airports in which it offers space to cosmetic companies (among others)lips  for the exclusive storage of their products. The spaces are normally staffed by uniformed specialist staff on behalf of each company, one of which was Shiseido, a Japanese cosmetics company  [8]. In 2000 Shiseido entered an agreement with Caroline South Associates (“CSA”) under which CSA would provide management services to Shiseido. This included dealing with the staffing of Shiseido’s outlet spaces [9].

In 2001 Mrs Halawi began working as a uniformed beauty consultant selling Shiseido products in a duty-free airside outlet at Terminal 3. Initially she worked through an agency – according to the ET, with assistance of CSA. – but in 2002 she set up a limited company, Nohad Ltd (“N Ltd”), which thereafter invoiced CSA for her time and services at an hourly rate set by CSA; and CSA, in turn, invoiced Shiseido. Mrs Halawi ‘s case was that CSA had forced her to set up the company; but the ET found that she had exercised her free choice to operate through N Ltd [10].

Because it was beyond the security gates – “airside” – to work in the store she needed two authorisations: a “store approval” from WDF and a British Airports Authority airside pass which, in her case, was sponsored by WDF [7]. But in June 2011 WDF withdrew her airside pass, effectively making it impossible for her to work at WDF’s outlet [12]. She subsequently brought proceedings against both WDF and CSA in the ET, claiming that the withdrawal was discriminatory on the grounds of race and/or religion [12].

The tribunal proceedings

Before the ET she argued that, in effect, she was working for WDF; and she filed witness statements which, she contended, showed the measure of control which WDF exercised over the way she carried out her duties as a beauty consultant [14]. She stated, for example, that she had to get permission from WDF in order to take holidays and that WDF could dismiss her by removing her airside pass. In addition, the Shiseido products available in the outlet where she worked were bought and sold as WDF’s stock, which meant that WDF profited from her services [14].

The ET, however, noted that there was only very limited documentation about the web of commercial relationships: the only documentation recording the relationship between Mrs Halawi and WDF was a handbook described as containing business-partner guidelines. It drew a distinction between employees and business partners, so Mrs Halawi could not have been unaware of that difference [16]. Nor was she entitled to holiday pay or sick pay [17]. Taking all that and other facts into account, the ET concluded that Mrs Halawi was not an employee for the purposes of section 83 of the Equality Act 2010. In October 2013 Langstaff J, the President of the EAT, dismissed her appeal, rejecting her arguent that the web of relationships was a disguise and that in reality she was in an employment relationship with WDF.

The judgment

It was argued for Mrs Halawi:

  • that in his EAT judgment Langstaff J had erred in law  because his decision had not given effect to EU law;
  • that employment had an autonomous meaning in EU law; and
  • that the correct approach was that an employment relationship existed if Mrs Halawi was in a relationship of subordination, ie a relationship of economic dependency and economic value to the enterprise; and personal service was not a requirement in order to demonstrate the existence of that relationship.

On the facts, Arden LJ, delivering the sole judgent, concluded as follows:

  • The ET had found that Mrs Halawi was not subject to WDF’s control in the way she carried out her work. There was no documentation to support the existence of employment and independence was not a necessary feature of her work. The requirement for subordination had to be satisfied in order to make a finding of an employment relationship; and its absence was consistent with her lack of integration into WDF’s business [44].
  • Mrs Halawi had a power of substitution which was inconsistent with the requirement personally to perform the services and, though rarely used, that power of substitution was not simply a sham [49].
  • The principle of effectiveness – that the Court should provide a remedy for the breach of a right conferred by the law against another person – could only apply where there had in fact been such a breach; and that did not apply in Mrs Halawi’s case [55].
  • Articles 15 (right to work), 21 (non-discrimination) and 47 (effective remedies) of the EU Charter of Fundamental Rights and Freedoms did not alter the meaning of “employee” (or worker) in EU law and were therefore of no assistance in determining the appeal [56-58].

The appeal was dismissed. It had not been established that there was any incompatibility between section 83(2) Equality Act 2010 and EU law and the Court declined the request to refer the case to the CJEU for a preliminary ruling.

Comment

According to a post by Christian Concern, Court of Appeal says Christian worker has no discrimination protection:

“The case raised important issues about the disparity of treatment of Christian and Muslim workers. Nohad says her substantive complaints were effectively ignored by World Duty Free but that the company acted immediately to end her livelihood when unsubstantiated complaints were made against her. She believes that she lost her role because she spoke up for the freedom of Christians and dared to stand against inappropriate conduct by a group of Muslim employees”

The post also notes that 22 of Mrs Halawi’s colleagues, some of them Muslims, signed a petition for her reinstatement.

Whether or not the case does, in fact, raise issues about disparity of treatment as between Christian and Muslim workers we shall never know, because that is not what the judgment is about: the issue of religion was not mentioned. The point at issue was whether or not Mrs Halawi, who provided her services to WDF through her own company, had an employment relationship with WDF of a kind that gave rise to enforceable employment rights. The Court of Appeal decided, on the facts, that she did not – and absent such a relationship, any further argument about discrimination in employment, religious or otherwise, simply falls away. Though Arden LJ – like Langstaff J in the EAT – had

“an uneasy feeling that the complex arrangements have the effect that the appellant has no remedy for discrimination even if she has been a victim of discrimination (an issue which has not been determined at any stage of these proceedings)” [54]

she concluded that she was bound to hold that the conclusions of the ET flowed from the findings it had made.

If there is a mischief here, it surely cannot be religious discrimination because that point was not addressed by the Court; rather, it is the more general one of the increasing tendency of companies to organise their activities through a complex web of subcontractors and service suppliers with the intention, at least in part, of limiting their legal duties and liabilities as employers.

Cite this article as: Frank Cranmer, "Religious discrimination in employment? – only if you’re employed: Halawi v WDFG UK Ltd" in Law & Religion UK, 30 October 2014, https://lawandreligionuk.com/2014/10/30/religious-discrimination-in-employment-only-if-youre-employed-halawi-v-wdfg-uk-ltd/

3 thoughts on “Religious discrimination in employment? – only if you’re employed: Halawi v WDFG UK Ltd

  1. I accept that at first glance the Christian Concern (‘CC’) headline can be read as implying the Court of Appeal decision focussed on the fact that the worker was a Christian.

    But in fairness to CC the article does also say, ” The case could have implications for thousands of workers in the UK who use employee controlled companies.” and “Nohad’s case has huge implications for many others like her who are employed through certain contracting arrangements. If employers are able to sidestep employment protections, including anti-discrimination regulations, on a whim, then the position of those workers is very precarious.”.

    Which as you rightly say was the sole point of law on appeal. Maybe “The facts of the case raised important issues about the disparity of treatment ,,.” rather than “The case raised …”

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