Third party harassment: clarification from the Court of Appeal

Court of Appeal confirms that employers will generally not be liable for the harassment of an employee by a third party, unless dealt with in a manner…

If an employee is harassed by a third party, such as a client, customer or member of the public, will you as their employer be held liable?

In Unite the Union v Naillard, the Court of Appeal has provided much needed clarification on this important question. The Court confirmed that, while every case turns on its own facts, an employer will generally not be liable for the harassment of an employee by a third party, unless the employer has failed to deal with the harassment in a manner that is also motivated by discrimination.

The claim

The claim arose because someone employed by Unite the Union as a regional officer was bullied and harassed by two officials, who were employed by the airport, not by the union. The case and the appeal addressed a number of issues about the Union’s liability for harassment, but the important part of the Court of Appeal’s Judgment is about when employers generally are liable for harassment by a third party.

The key part of the decision

Between 2010 and 2013 there were specific provisions in the Equality Act 2010 dealing with whether employers were liable for third party discriminatory harassment of employees. These provisions were known as the ‘three strikes rule’ because, if an employer knew that an employee had been harassed by a third party on at least two previous occasions, it would be liable for the third incident of harassment that took place. However, these provisions were repealed as they were seldom used and it was often difficult for employees to establish three separate incidents of harassment.

However, the repeal of these provisions created uncertainty for employees and employers alike. It was not clear how, if at all, a complaint of harassment by a third party fitted in to the remaining legal framework around discrimination. Case-law seemed to suggest that, if an employer created a hostile environment for an employee or failed to tackle discriminatory behaviour by a third party, it might still be liable.

This high level decision clarifies the position. The Court of Appeal held that employers should not be liable for harassment by third parties as “negligent failure to prevent another’s discriminatory acts is a very different kind of animal from liability for one’s own”. It said that if Parliament had intended there to be continuing protection against third party harassment, it would not have repealed the “careful and explicit scheme” set out in the Equality Act.

Importantly, as an employer you may still be liable for failing to deal effectively with third party harassment, but only if “the individual decision makers are found …to have been significantly influenced, consciously or unconsciously, by the relevant protected characteristic” (in this case, the claimant’s sex).

What does this mean for me?

Is it important to remember that this Judgment does not change the fact that as an employer you will still be held vicariously liable where an employee is harassed by another of your employees. It applies only where the employee has been harassed by a third party.

An employee may still allege that your manager, investigator or decision-maker have themselves acted in a discriminatory way in the way they manage the employee or investigate or decide the outcome of any complaint. If, for example, the employee alleges that your manager/investigator has deliberately sided with the third party because they share their gender or other protected characteristic, that could still be discrimination for which you would be liable. However what this Judgment means is that you are not discriminating against the employee just because they have been harassed or discriminated against by a third party, nor is it unlawful discrimination if you do not handle the issue well – simply because the third party’s actions were themselves discriminatory.

We would never advise you to ignore or refuse to investigate a complaint by an employee of harassment, simply because the alleged harasser is not your employee. However, this makes it less likely that an employee will be able to bring a successful harassment claim against you in these circumstances.

Comment

This decision provides welcome guidance on a notoriously tricky area of law. For the time being at least, an employer will not be liable for harassment of an employee by a third party unless it has been motivated by discrimination in failing to effectively tackle that behaviour.

However this leaves an obvious gap in the law and means that employees who suffer harassment at the hands of third parties are unprotected. With the issue of sexual harassment gaining ever increasing profile following, for example, the scandal at the President’s Club and the #MeToo social media campaign, there is mounting pressure for this lacuna to be filled.

In February 2018, the Government launched an inquiry into the sexual harassment of women and girls in public places which is expected to report shortly. The inquiry is considering whether to reintroduce some form of explicit third party harassment protection (although a return to the ‘three strikes rule’ is probably unlikely). Other protective measures such as mandatory sexual harassment risk assessments for female workers and the extension of time limits in sexual harassment claims (from three to six months), are also under discussion.

Any allegation of harassment, whoever the alleged perpetrator, can be sensitive and complex. Please do not hesitate to contact us for advice or support.

If this case raises any issues for you or your organisation please speak to your usual contact in the Weightmans Employment, Pensions and Immigration team or our partner, Phil Allen.

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