When is an employer liable for other people’s discrimination against its employees?
By: Tracey Moss
Tags: Employment, Law, Employment Law, Employment Online

When is an employer liable for other people’s discrimination against its employees?

A long form article to help advisers identify whether discrimination at work is unlawful

Advisers might have to consider whether an employer is responsible when a client has been discriminated against by:

a colleague or

an outside party, like a customer of the business

‘Vicarious liability’ is the name given to the employer’s responsibility for other people’s actions.

Vicarious liability in the Equality Act 2010

Section 109 of the Equality Act 2010:

(1) Anything done by a person (A) in the course of A’s employment must be treated as also done by the employer.

(2) ……….

(3) It does not matter whether that thing is done with the employer’s or principal’s knowledge or approval.

(4) In proceedings against A’s employer (B) in respect of anything alleged to have been done by A in the course of A’s employment it is a defence for B to show that B took all reasonable steps to prevent A —

(a) from doing that thing, or

(b) from doing anything of that description.

So, if an employee sexually harasses a colleague the employer is vicariously liable for that harassment, provided the harasser was ‘acting in the course of his employment’.

Section 110 makes the employee who carries out the discrimination personally liable for their actions, meaning they can be sued as well as the employer.

Employers can also be liable if they engage an ‘agent’ who commits harassment. An agent is someone appointed by the employer to act on its behalf in dealings with employees or other parties. For example an external consultant engaged to help carry out redundancies or union representatives carrying out the union’s work with its members.

Although the rules are often relied upon in harassment claims they apply to all types of discrimination.

‘In the course of employment’

The test is a wide one, meaning tribunals can take a very broad approach to whether the person was acting in the course of their employment. It doesn’t mean that the discrimination has to happen at work.

It extends to any situation where there is a sufficient connection to work, or to the workplace. So for example an employer may be vicariously liable where

an employee discriminates against a colleague at a work party. or in a hotel where colleagues are staying for a conference

discriminatory comments are posted on social media sites, if people are only connected because of work and the comments are posted on work computers or during working hours, or it’s likely they will be seen by other colleagues.

The employer’s defence

The employer is vicariously liable even if they were unaware of the comments being made. They can only avoid vicarious liability by showing they took all reasonable steps to prevent the employee doing the act in question.

Usually this will mean the employer arguing that:-

they have good anti-discrimination policies and procedures,

these are put into practice rather than remaining ‘paper only’ measures,

they demonstrate that they take allegations of discrimination seriously

they give all of their staff, or at least their managers, training in how to prevent and deal with discrimination

It’s not enough for an employer to simply say they took all reasonable steps. Tribunals will examine their defence carefully. Advisers can help clients challenge the employer by looking for facts and evidence to prove that the employer did not take all reasonable steps. This could include asking for managers’ training records or identifying other steps the employer could have taken.

Surprisingly, where the discrimination is committed by an agent the employer has no defence that it took all reasonable steps to prevent it.

What if the discrimination is by third parties such as customers or clients of the business?

When the Equality Act 2010 came into force it said that an employer would be liable for harassment by third parties if:

it had occurred at least three times

the employer was aware it had happened on at least two occasions and

had not taken reasonably practicable steps to prevent it.

This part of the Equality Act 2010 was later repealed. This means workers who are harassed at work by customers or clients don’t have a clear claim against their employers.

Unite the Union v Nailard: an attempt to make employers liable for failing to prevent third party harassment

In Unite the Union v Nailard [2018] a full time official employed by a union was sexually harassed by 2 lay officials employed at Heathrow Airport. The harassers were therefore not employed by her employer. The claimant won her case on the ground that the lay representatives were ‘agents’ of the Union. However, she also argued that the union’s failure to protect her from the harassment, and instead relocate her, was an act of harassment by them.

Before the third party harassment rules were introduced this was only arguable when an employer’s failure to protect the employee was ‘because of’ the employee’s protected characteristic. The Court of Appeal had to consider whether this had changed as a result of the wider wording in the Equality Act (which says that conducted ‘related to’ a protected characteristic is discriminatory).

The Court ruled that the law had not been affected by the change in wording. The fact that the lay officials had done an act capable of being discrimination was not enough. The employer’s failure to deal with it had to be ‘related to sex’. The Court did not rule out the possibility that there might be cases where liability could arise, if the employer’s failure to protect the employee is consciously or unconsciously related to their sex (or other protected characteristic).

It’s likely there will be few cases in which the employer can be said to be motivated by the protected characteristic. The infamous example of the President’s Club event might be such a case. Female hostesses were sexually harassed by guests at a male-only charity event. The organisers included an advert forbidding harassment of staff in the event programme. However they also required the women to wear revealing clothes and encouraged them to drink alcohol with guests. It’s certainly arguable that the failure to do more to prevent the harassment was related to sex, given the other actions of the organiser.

Conclusion

Employees harassed by someone other than a fellow employee or agent of their employer are unlikely to have a claim under the Equality Act.

In July 2019 the government published a consultation on reintroducing employer liability for third party harassment so advisers should watch out for developments in this area.

Tracey Moss is a Senior Employment Expert in the Expert Advice Team at Citizens Advice.

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