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Nearly five years on from the Women and Equalities Select Committee Report on Sexual harassment in the workplace (HC 725, 25 July 2018), three and a half years after the Government’s Consultation on sexual harassment in the workplace (GEO, Summer 2019) and nearly two years (post-Covid-hiatus) of the Government’s response to that consultation (GEO, 21 July 2021), the House of Lords is currently considering changes to employment (and separately public) harassment legislation. The Worker Protection (Amendment of Equality Act 2010) Bill, introduced as a Private Members’ Bill in the House of Commons but supported by the Government, seeks to implement some of the recommendations of the Select Committee’s report. In effect, it reinstates (in clause 1) part of the third-party harassment provisions removed from the Equality Act 2010 in 2013 and introduces a positive duty on employers to take all reasonable steps to prevent sexual harassment of employees, which is defined to include ‘limb b’ workers (s.83(2)). This post sets out the background, examines the proposals and considers an alternative way of achieving protection.
2. The background to the Bill
Discrimination law has traditionally been based on prohibitions rather than the imposition of positive duties – thus employers and the like must not discriminate or harass those who work or apply to work – although there are increasing examples of the latter (such as the duty to make reasonable adjustments for disabilities and the ‘Public Sector Equality Duty’).
Initially, harassment claims relating to protected characteristics could only be brought as direct discrimination claims under discrimination legislation. A specific statutory definition of, and action for, harassment within thid legislation was first introduced in 2003. It was introduced for aspects of race and then alongside the introduction of protection from religion or belief and sexual orientation discrimination. This was achieved in similar terms to Recommendation 92/131/EEC which had been adopted by the UK Employment Appeal Tribunal for harassment within direct discrimination in 1999, and as used in subsequent EU directives. The definition and action was extended to the ground of sex in 2005.
There was previously an important difference between direct sex discrimination and direct race (and latterly religion or belief and sexual orientation) discrimination. The difference was that the Sex Discrimination Act 1975 used a claimant-specific phrasing when defining direct sex discrimination (the less favourable treatment being ‘on the ground of her [or his] sex’). In contrast, the Race Relations Act 1976 for example used a more expansive phrasing (‘on grounds of race or ethnic or national origins’). This led to different phrasing in the subsequent statutory definitions of harassment, with sex and disability harassment referring to the claimant’s own characteristic. The use of the narrower, claimant-specific formulation in the Sex Discrimination Act 1975 was challenged by the Equal Opportunities Commission in EOC v Secretary of State for Trade and Industry  EWHC 483 on the basis that the provision did not properly transpose the source EU directive 2002/73/EC which used the non-claimant specific phrasing (‘unwanted conduct related to the sex of a person’ which had such purposes or effects). Burton J ruled that the national provision should be recast so it wasn’t restricted to the claimant’s own characteristic. He noted that, in doing so, some claims arising from exposure to the acts of third parties, which were not explicitly or implicitly required by the directive, could become possible. This was as the change from the causative ‘on grounds of her sex’ to the associative ‘related to sex’ of a person expands the reach of the provision to include exposure and considerations of a more general nature: it is not because of her sex they are exposing her to unwanted conduct, but because it is related to sex the exposure to the situation may cause her to suffer unwanted conduct .
In its response to EOC, the Government, however, went further and alongside the change to the definition of harassment in the Sex Discrimination Act 1975 (adopting the ‘related to’ formulation), they introduced a discrete provision extending the employers’ liability for harassment to acts of third parties if certain requirements were met. This was then carried over and extended to the other protected characteristics in the unifying Equality Act 2010. Section 40(2)-(4) of the Equality Act 2010 held that:
Previous case law under the direct discrimination regime had suggested that employers could be liable for exposing employees to situations where they may be harassed: ie Burton and anor v De Vere Hotels Ltd  ICR 1. However, this potential was overruled by the House of Lords in Pearce v Governing Body of Mayfield Secondary School  ICR 937 which maintained that vicarious liability did not stretch to third parties and the focus should be on the employer’s behaviour. The emergence of the statutory definition of harassment gave rise to the view that Pearce, based on the old narrow sex discrimination interpretation, was old law and there was recognition by the EAT that there could be liability for exposure to harassment (Sheffield City Council v Norouzi  IRLR 897, ). The Government subsequently claimed it had “always been the Government’s interpretation that such liability was implicit in the existing legislative framework, as reflected in published guidance for employers and others” (Explanatory Memorandum to S.I. No. 2008/656 (para 7.14)).
Given the Government’s view and the lack of use of the highly limited and arguably ‘unworkable and superfluous’ provision, the subsequent Coalition Government repealed section 40(2)-(4) in October 2013. However, the Court of Appeal effectively closed off this ‘implicit’ alternative in 2018 in Unite the Union v Nailard  EWCA Civ 1203, holding that harassment under sections 26 and 40 through exposure to third-party acts required discriminatory motive by the employer in so exposing them: rather than looking at the effect. Thus, under Nailard, as noted in evidence to the Women and Equalities Select Committee:
“…employers may continue to be liable” but only “where they discriminatorily expose their employees to harassment by third parties” and “not where their action or omission (untainted by discriminatory intent) exposes their employees to e.g. sexual or racial harassment by third parties. Rather than focus on the harm done and what (if anything) could have reasonably been done to prevent it, the test will be what was in the mind of the employer at the time” (SHW0085).
This unsatisfactory situation led the Committee to recommend that “if the judgment stands, we believe that a new protection must be put in place, and this should not be restricted to cases where there were previous occurrences of harassment as was the case under the original section 40” (para 41) and to the Government to propose that they “introduce explicit legal protections against third-party harassment in the workplace” (para 4.2).
3. The provisions of the Worker Protection (Amendment of Equality Act 2010) Bill
The Worker Protection (Amendment of Equality Act 2010) Bill seeks to reintroduce statutory liability for third-party harassment and introduce a positive duty to prevent sexual harassment. In the form introduced into the House of Commons, the Bill sought to insert after section 40(1) of the Equality Act 2010 (the provision that says employers should not harass employees or applicants):
These provisions are a near copy of the old section 40(2) and (4), but the reasonable steps defence has changed from failing to take “such steps as would have been reasonably practicable” to a failure to “take all reasonable steps”. The new wording matches that used in the long-standing statutory secondary liability of employers provision in section 109(4). The old section 40(3), which required the conduct to have occurred twice before, has, however, been omitted. While going through the Commons, the sponsor (Wera Hobhouse MP) and the Parliamentary Under-Secretary of State for Women and Equalities (Maria Caulfield MP) tabled an amendment to address concerns about free speech, inserting subsections (1C) and (1D):
The amendment also modifies the ‘reasonable steps’ defence within section 109 to add in this exception. It has the effect of limiting the definition of harassment to focus on the purpose of the political, moral, religious or social speech, rather than the purpose or effect.
Another innovation is that the proposed section 40A(1) would introduce a positive duty to take all reasonable steps to prevent sexual harassment of employees in the course of their employment. Unlike the prohibitory unlawful act provisions (such as section 40), and like the Public Sector Equality Duty, this would be enforceable by the Equality and Human Rights Commission (“EHRC”) rather than by individual claimants. However, where an individual brought a successful section 40 harassment claim, the Employment Tribunal could make an uplift to compensation of up to 25% under the new section 40A(3) and section 124A.
4. Analysis of the provisions of the Bill
It could be argued that the positive duty is superfluous; a duty of sorts already exists – if employers, for example, allow harassment they lay themselves open to action under section 40 of the Equality Act 2010 and if the EHRC see unlawful acts occurring they can launch enforcement actions/inquiries under the Equality Act 2006 (as seen recently with the Labour Party and IKEA). The duty would be reinforcing what to a large extent is already there, as to show reasonable steps have been taken, employers must show that they have policies which are known, are reasonably effective and are enforced. However, a duty could help maximise the focus of the employers and could thus be of value. While such restatements may lead to unforeseen extensions or limitations to the underlying law (a concern that caused the Government not to extend harassment protection to volunteers (para 3.4), they can provide extra publicity and impetus. This makes the duty – even if superfluous – an extra tool in the armoury against harassment and the potential increase in damages is an additional element.
Concerns about the reference to taking ‘all reasonable steps’ as opposed to ‘reasonable step’, which apply to both the liability for third parties and the positive duty, were addressed in the second reading debate in the House of Lords. The Parliamentary Under-Secretary of State, Baroness Scott of Bybrook, noted that the phrasing had been used in the Act for some time with regard to employers’ liability for employees’ acts in section 109, and that while:
“What constitutes “all reasonable steps” is not currently defined in law and we do not intend to do so, as this would remove the flexibility to take a proportional approach based on the individual circumstances of the workplace”
The phrasing permits the Tribunal to take account of the workplace environment, the size of the organisation and known risk factors, as well as cost and practicality. In addition, the proposed amendment would also make “clear to employers that, in certain cases, this should not include shutting down conversations or preventing the expression of opinion” (col 2016). Furthermore, the EHRC would publish a new statutory code of practice to take account of the measures in the Bill ahead of its implementation (per the proposer in the Lords, Baroness Burt of Solihull, col 2002) and the Bill would not be brought into force until a year after receiving Royal Assent (as provided for in Clause 6(3)).
With regard to liability for third-party harassment, the new subsections (1C) and (1D) has the effect of limiting the definition of harassment to focus on ‘the purpose’, rather than ‘the purpose or effect’, of the political, moral, religious or social speech. This goes some way to address free speech concerns. The new subsections (1A) and (1B) as noted do not appear to be new but almost exactly replicate the old section 40(2) and (4). But the omission of the old section 40(3), which limited liability to where the employer knew that B had been harassed in the course of B’s employment on at least two other occasions by a third party (and it did not matter whether the third-party was the same or a different person on each occasion), is broadly welcomed.
However, by placing specific third-party liability provisions in section 40 (and the positive duty in section 40A) the provisions are, despite the title of the Bill being the Worker Protection (Amendment of Equality Act 2010) Bill, limited to employment. The provisions would thus seem to exclude workers such as partners, barristers, and public office holders (whose prohibition of harassment appear in sections 44(3), 47(3), and 50(4) respectively). The position of contract workers, but not others, was raised in the second reading debate in the House of Lords (cols 2009-10, 2017-18). As the definition of contract worker requires them to be employed by another person (section 41(5)(a)) they may have some protection even if it is against a body that is more remote from the harassment, but that remoteness may have an effect on the reasonableness of steps. This protection gap and other issues could have been resolved through an alternative means of protection.
5. An alternative approach to that of the Bill
The effective reinstating of parts of the old third-party harassment provisions brings back some of the problems (despite the welcome jettisoning of the ‘more than two occasions’ requirement). One of those is the apparent exclusion of certain workers from protection as noted above. Another is the muddling of the concept of vicarious or secondary liability. The reasonable steps defence in section 109(4) provides a statutory version of vicarious liability which arises because of the relationship between employer and employee. This is very different from the relationship between a business and its customers. An employer has greater scope to discipline and provide training for an employee than it does a customer (indeed, to take the examples of reasonable steps in the current EHRC Statutory Code of Practice on employment (para 10.52) – “implementing an equality policy; ensuring workers are aware of the policy; providing equal opportunities training; reviewing the equality policy as appropriate; and dealing effectively with employee complaints” – all but the last apply much more easily to employees than to customers or other third parties. The replication of the employer-employee provisions for third parties tends to hide that difference.
Baroness Scott of Bybrook tried to reassure members of the House of Lords by stating that “it is important to note that the concept of “all reasonable steps” has been in the Equality Act since its inception in the context of employers’ liability, and that it is well understood by employers and employment tribunals; this is nothing new.” It is true that it is a flexible test in employment, but that flexibility risks becoming blurred when applying what seems to be a direct analogue to a conceptually different relationship – and it is unnecessary to seek to do so.
Instead, the decision in Unite the Union v Nailard  EWCA Civ 1203 could be statutorily reversed by other means – not through the introduction of quasi-vicariousness (with a statutory reasonable steps defence) but through what was considered to be possible before Naillard. As Explanatory Note 10 to the Bill puts it “until 2018, the Government’s position was that the 2010 Act continued to provide protection in cases of third-party harassment under section 26”. Rather than focus on copying the secondary liability regime, the focus could be on the employer’s (and others’) primary liability for exposing employees and the like to the harassing environment. This would, as Underhill P noted in Sheffield City Council v Norouzi  IRLR 897,  take account of there being:
“…environments – including prisons, homes [as in Norouzi], and, regrettably, some schools – where employees may be subjected to a level of harassment on a proscribed ground which cannot easily be prevented or eradicated. In such cases the employer should indeed not too readily be held liable for conduct by third parties which is in truth a hazard of the job; and if it is to be held liable on the basis that insufficient steps were taken to protect the employee in question a tribunal must be prepared to focus on what precisely could have been done but was not done.”
Under section 26(4), third-party harassment within the Equality Act 2010 should only be found when each of the following has been taken into account: the perception of the complainant; the other circumstances of the case; and whether it is reasonable for the conduct to have the harassing effect.
In current society, this should mean for example that exposure to boorish behaviour may (depending on the circumstances) not be reasonable – such as where there is foreseeable and continued unwanted conduct in a hospitality setting – whereas exposure of carers to those with behavioural difficulties may be reasonable (as long as other matters such as contractual and tortious protection are met). A small amendment to Section 26(1) and (2) could clarify that “engages in” includes exposure to such environments with section 26(4) regulating the reasonableness. If necessary, the unlawful act provisions could be amended to prevent liability in certain situations, in the same way that the harassment in the provision of services prohibition restricts the coverage by excluding some protected characteristics. Such an approach could sit alongside the new positive duty to prevent sexual harassment without muddying the concept of vicarious liability.
James Hand is an Associate Head (Research) and Reader in Law at the University of Portsmouth. He publishes primarily on Equality Law and related topics.
(Suggested citation: James Hand, ‘Liability for harassment by third parties in the Equality Act 2010,’ UK Labour Law Blog, 13 April 2023, available at https://uklabourlawblog.com/)