Calls to make employers liable for third-party harassment

Plans would offer further protection for employees who suffer harassment from customers and clients.

Although employers have a legal obligation to protect their employees from harassment by their colleagues and managers, the law continues to remain unclear on appropriate responses to the actions of third-parties. Up until October 2013, Section 40 of the Equality Act made employers liable for third-party harassment if it was found that the same issue had recurred three times and they had not taken reasonable steps to prevent it. Although this was repealed by the Enterprise and Regulatory Reform Act 2013, a recent statement by the Confederation of British Industry (CBI) has called for it to be reinstated.

Currently, there is a duty for employers to protect their employees from this type of abuse but it is unclear how far this extends. Employees can bring a discrimination claim under the Equality Act 2010 if it is found that an employer’s inaction against conduct relating to a protected characteristic is causing a hostile, intimidating or degrading environment. Furthermore, employers could also face indirect discrimination claims if this inaction is a provision, criterion or practice that places workers at a disadvantage because of their protected characteristic. However, case law suggests that tribunals can be wary in their approach to this issue, with the Employment Appeal Tribunal commenting that some workplaces may expose employees to a risk of harassment not easily eradicated and therefore urging that employers are not found too readily liable.  

The CBI argues that reinstating Section 40 would provide further clarity in this area, concluding that whilst it would not prevent all cases of third-party harassment it could encourage victims of this treatment to speak out and thus help to prevent situations like the President’s Club scandal in January of this year. Although Government consultations conducted in 2012 labelled Section 40 as ‘unnecessary’ and ‘without any real or perceived need,’ the CBI highlights that most businesses are actually all for reinstating Section 40, with 71 per cent of the respondents to the original consultation being against its repeal.

This may be concerning for companies who feel they could potentially be liable for the actions of individuals they have limited control over. Although it remains to be seen how the Government will respond to these recommendations, it would therefore be a good idea for organisations to maintain a zero tolerance policy to the harassment to its staff and be prepared to respond strongly if it is found this has taken place. This can include clearly displaying posters throughout the building that advises upon this, as well as outlining any potential consequences for the individual in question. Employers can also include a clause in employee contracts reaffirming their zero tolerance stance and stipulating actions that will be taken in these situations.

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