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When can employers be liable for the discriminatory act of their employees and what steps can employers take to reduce the risk of liability?

Posted on 30th August, 2017

In this article, Stacey West talks about some of the steps employers can take to help create a work environment free from unlawful discrimination, harassment and victimisation and discusses what employers can do to minimise the risk of being found vicariously liable for discriminatory acts committed by their employees in the course of their employment.

Employers are liable for any unlawful acts of discrimination, harassment or victimisation they commit against their employees. However, it is important for employers to be aware that they can also be liable under the Equality Act 2010 for the unlawful discriminatory acts carried out by their employees in the course of their employment – whether or not it was done with the employer’s knowledge or approval.

There is a defence available to employers within the Equality Act 2010 and that defence is available where the employer can show it took ‘all reasonable steps’ to prevent the employee from doing the discriminatory act or from doing anything of that description. This is a high hurdle for an employer to overcome and leads to the question of what practical steps can an employer take to help demonstrate they have taken all reasonable steps to prevent the discriminatory act from occurring?

From the wording of the defence, it is clear that the employer has to take proactive steps to prevent discrimination from occurring before the particular act takes place and that reactive measures, once the discrimination has occurred, will not suffice. Case law has held that employment tribunals, when considering this defence, should look at:

  1. What steps did the employer take?
  2. Were there other steps the employer could have taken?

Reasonable steps in these circumstances, taking into account guidance from the Equality Act 2010 Code of Practice on Employment, will often include:

  • Ensuring that there is an Equal Opportunities Policy and an Anti-Harassment Policy in place. These policies should be reviewed on a regular basis, monitored appropriately and kept up-to-date.
  • Making sure all their staff are aware of the policies as well as the potential repercussions if they act in breach the policies. This will help to demonstrate that the employer is taking proactive steps to raise awareness and tackle any discrimination in the workplace.
  • Providing appropriate training to all employees on equal opportunities in the workplace and those with management or supervisory responsibilities should be given suitable training on how to deal with issues that may arise.
  • Dealing with any complaints of discrimination or harassment in the workplace appropriately, in accordance with the policies, and employers should be able to show that they implement the relevant policies in practice.

With compensation for discrimination claims uncapped, it is important for all employers to assess whether the processes and documentation they have in place within their organisation are fit for purpose in seeking to prevent discrimination in the workplace and to reduce the likelihood of them being vicariously liable for any discriminatory acts committed by their employees. Employers should review their processes and documentation at regular intervals.To do otherwise could leave the business exposed to potentially costly discrimination claims along with the reputational damage that can come from discrimination claims being upheld against a business.

With employment tribunal fees now no longer in place, employees can once again bring employment tribunal claims at no financial cost. While the number of claims reduced significantly during the period when employment tribunal fees were in place, employers may now see an increase in tribunal claims being brought by employees. It is therefore imperative that employers take the time now to review the policies and procedures they have in place, ensure they are fit for purpose and if not, address the issues without delay.

We draft equal opportunities and anti-harassment policies tailored to each organisation. We also provide bespoke training sessions on equal opportunities in the workplace to a range of employers across a number of sectors.

If you would like to discuss our range of services in more detail or any of the issues raised in this article, please contact one of the solicitors in our Employment team.

Stacey West, Assistant Solicitor, Employment, Jacksons Law Firm


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