Employers liable for harassment of their staff by third parties

Employers liable for harassment of their staff by third parties

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Employers may once again be liable if their staff are harassed by members of the public and may soon be under a new positive duty to prevent sexual harassment. The Worker Protection (Amendment of Equality Act 2010) Bill is currently working its way through the House of Lords. We thought it would be helpful to summarise the key provisions of the bill as currently drafted, and how they will impact employers.

Employer liability for third party harassment

The bill makes employers liable for the harassment of their employees by third parties in certain circumstances. This may apply, for example, to the employer of retail staff harassed by customers, or of office staff harassed by visiting maintenance contractors.

Employers already liable for harassment by employees

Employers can already be held vicariously liable for discriminatory acts committed by employees in the course of their employment, such as a male manager sexually harassing a female associate on a business trip. The law provides that an employer may be liable for such harassment, whether or not the employer sanctioned the harassment or even had knowledge of it. The employer’s only defence is to show that they took all reasonable steps to prevent the employee from harassing another.

Bill reintroduces previous rules making employers liable for third party acts

The bill seeks to reintroduce employer liability for third-party harassment; that is, where employees are harassed, not by other members of the employer’s workforce, but by a third-party, such as a client, visitor or member of the public.

The principle that employers should be liable for harassment perpetrated against their staff by third parties is not new. Employers were previously liable for third party harassment where they failed to take such steps as would have been reasonably practicable to prevent the harassment AND where the employer knew that the employee has been harassed in the course of their employment on at least two other occasions (whether or not the third party was the same person on each occasion). For example, if a waitress was harassed by a customer, she would need to show that she had been harassed on two previous occasions for her employer to be liable (as well as establishing that her employer failed to take reasonably practicable steps to prevent the harassment). These rules were repealed in October 2013, arguably leaving a gap in the legal protection afforded to workers who are vulnerable to third party harassment.

Employers may be liable for one-off or first acts of harassment

Under the bill, an employer is no longer required to have knowledge of previous occasions of harassment, so could be liable for a one-off or first act of harassment. This may prove challenging for employers, as they may find themselves liable without any prior warning or indication that their staff are at risk of harassment from third parties. As before, the employer will have a defence if it can show that it has taken all reasonable steps to prevent the third party harassing the member of staff; but what does this mean in practice for employers? The Government Equalities Office (GEO) is creating a statutory code of practice on sexual harassment and harassment in the workplace, with accompanying guidance, which will hopefully set out practical examples of steps that employers should consider taking to prevent third party harassment. The statutory code and guidance is likely to be based on guidance issued by the Equality and Human Rights Commission (EHRC) in 2020. This emphasised that what an employer can do to prevent harassment and protect its workers will depend on the size and nature of the employer, the resources available to it, and the risk factors that need to be addressed within the particular employer and sector. Employers are encouraged to conduct a regular review of appropriate steps to prevent harassment, and should also prepare strategy documents to accompany their anti-harassment policy.

Employers not to prevent the expression of opinion

An employer will not be expected to prevent the expression of opinion to pre-empt harassment of its staff, providing the opinion expressed is “not indecent or grossly offensive”. Concerns were raised by stakeholders that, otherwise, the legislation may have a negative effect on free speech. Therefore, an employer will not be liable if their employee is subjected to harassment by overhearing a conversation to which they are not a party, if that conversation involves the expression of opinion on a political, moral, religious or social matter, is not indecent or grossly offensive, and does not have the purpose of violating the employee’s dignity or creating an intimidating or hostile environment for that employee. 

Employers will, nevertheless, be expected to take steps to prevent targeted speeches, and indecent or grossly offensive conversations in the workplace, such as racial slurs. Therefore, employers will not need to prohibit conversations about controversial topics, but will be expected to have a zero tolerance policy towards speeches or conversations in the workplace which are indecent or grossly offensive (including by third parties). Clearly, what is considered “controversial” by some, may be considered “grossly offensive” by others, and we can expect litigation to clarify these definitions once the bill comes into force. 

Positive duty on employers to prevent sexual harassment

The bill introduces a positive duty on employers to take all reasonable steps to prevent sexual harassment (unwanted conduct of a sexual nature) of its employees in the course of their employment. If an employee is sexually harassed and the tribunal finds that their employer failed in its duty to prevent that harassment, it may order an uplift in compensation of up to 25%. Again, the GEO’s statutory code and guidance will be critical to assisting employers in determining the steps which they are expected to take to avoid such liability. 

When are new rules expected to be in force?

Until the bill is passed into law, its current provisions may be subject to change. Even when the bill is passed, employers will have 12 months to prepare before the new rules come into force.  

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