As of the 1st October 2013 employers will no longer be liable for third party harassment, our employment law team explain the changes.
Under s.40 of the Equality Act 2010 an employer can be vicariously liable if a third party (such as a customer or a contractor) harasses one of its employees, provided the following conditions are met:
- That the third party had harassed an employee on at least two previous occasions; and
- The employer had failed to take reasonably practicable steps to stop the harassment.
However, during its consultation and review of the Equality Act, the Government suggested that s.40 was an example of unnecessary regulation which had been introduced without any real or perceived need, and that employees could pursue alternative legal routes if they considered that had been subject to repeated harassment by a third party. Accordingly s.40 will be repealed with effect from 1st October 2013 under the newly made Enterprise and Regulatory Reform Act 2013.
This change in the law provides some comfort to employers as they are no longer liable for third party harassment under the legislation, with the position reverting to that set out by the House of Lords in Pearce -v- Mayfield School (2003).
In Pearce, the House of Lords stated that whilst an employer's failure to prevent third parties committing acts of sexual/racial harassment might amount to discrimination, an employer will only be liable if it failed to take such steps to prevent the discrimination because of the employee's sex or race. This is a more stringent test and has significant ramifications for such discrimination claims, making it much harder for employees to demonstrate that they have been the victim of discrimination by third parties.
If you would like further information please contact a member of the employment law team.
