To what extent are employers liable for acts of discrimination or harassment by third parties against their staff? Solicitor Katee Dias has the answers

One of my employees is complaining that a customer has repeatedly subjected her to discriminatory comments. As an employer, can I be responsible for acts of third parties?

The law

The short answer to this problem is, potentially, yes. However, to understand the law, it is useful to look at an old case in which a hotel was found to be vicariously liable for the harassment of two black waitresses.

The waitresses were working during a function where comedian Bernard Manning was performing (Manning was not, however, employed by the hotel). Manning's act included sexist and racist remarks, some of which were directed at the waitresses. One male guest also tried to grope the waitresses. The hotel manager was aware of the offensive nature of Manning's act but took no action to restrict his material or remove the waitresses from the discriminatory environment. The hotel was held to be accountable for the sexual and racial harassment suffered by the waitresses, even though the discriminatory acts were not carried out by the hotel or its employees.

Later case law moved away from making employers vicariously liable in this way, but recently the law has gone full circle. First, a High Court ruling held that European law intended it to be possible for employers to be liable for workplace harassment by third parties. As a result, it is expected that the sex discrimination legislation will be amended - and changes to other discrimination legislation will follow in due course - making it clear that an employer can be liable for discriminatory acts of third parties.

Second, another recent case found that a local authority's policy, whereby employees had to refrain from challenging racist remarks made by clients, could make the employer vicariously liable for harassment by third parties. Employers are now back in the position in the Manning case described above.

Expert advice

If an employer knows of the discriminatory treatment but does nothing to stop it, they can be liable. It is, therefore, important to take preventive steps to stop harassment from taking place in the first instance. This is likely to include publishing an anti-harassment policy and taking all necessary steps to ensure that employees, workers and third parties are aware of it. Proper implementation of such a policy shows a tribunal that you uphold good practices.

In response to the employee's complaint, you will need to investigate this - and if the complaint is made in writing, the statutory grievance procedure will have been triggered.

Consider what action can be taken to avoid a repeat of the behaviour. For example, you might want to ban the customer from the premises.

Check list

Employers should:

• Remember that discrimination can take many forms - for example, direct or indirect harassment or victimisation - and can be on various grounds, such as sex, sexual orientation, race, religion, disability or age.

• Publish an anti-discrimination policy and implement this by training staff and investigating incidents. Ensure managers know how to react to situations where employees are being harassed by third parties.

• Consider whether it is possible to control the actions of a third party and, if so, what steps can be taken to prevent discrimination occurring.

Beware!

As well as a potential discrimination claim, an employee could argue that the employer has been negligent or breached its contractual duty by not providing a safe working environment, or even that they have been constructively dismissed. Unlimited compensation can be awarded in a successful discrimination claim and, currently, up to £69,900 for a successful unfair dismissal claim.

Contact
Katee Dias, employment solicitor, Goodman Derrick
020 7404 0606
kdias@gdlaw.co.uk