When an employee commits an act of unlawful discrimination, the individual’s employer will be vicariously liable – to the victim – for that employee’s conduct unless the employer can establish the “statutory defence”. To establish this defence, the employer must be able to demonstrate that it took “all reasonable steps” to prevent the perpetrator from doing “that thing” or “anything of that description”. The recent decision of the Employment Appeal Tribunal (EAT) in Allay (UK) Limited v Gehlen confirmed, perhaps unsurprisingly, that establishing this defence is a “high threshold” and that the burden of proof in this regard falls squarely on the shoulders of the employer.
In Allay, the employer sought to rely on the fact it had conducted training for its employees covering race discrimination and harassment to establish the statutory defence. This failed and the employer was found to be responsible for the racial harassment of the claimant employee by one of his colleagues. For example, the claimant, who described himself as being of Indian origin, was told he should work in a corner shop, asked why he was in the country and was subjected to remarks about the colour of his skin.
The employment tribunal (ET) accepted that the employer had conducted training, but concluded that this had become “stale” and therefore that the statutory defence could not be established. On appeal, the EAT upheld that decision – and rejected the employer’s arguments that the ET’s apparent focus on the effectiveness of the training had been an error of law. The ET had concluded the employer’s training was stale not only by reference to the fact that the racist remarks were made, but also because they had been overheard by one of the claimant’s colleagues and also by two managers – the colleague did not report the incident, and the managers did not take any action against the perpetrator.
Establishing the Statutory Defence
The EAT provided the following guidance on how the statutory defence should be considered by the ET. The steps the ET should take when assessing whether an employer can establish the statutory defence are threefold. The ET should:
- identify any steps that have been taken by the employer;
- consider whether they were reasonable; and
- consider whether any other steps should reasonably have been taken.
The EAT went on to make the following observations about the reasonableness of any steps taken:
“the analysis will include consideration of the extent to which the step, or steps, were likely to prevent harassment. Brief and superficial training is unlikely to have a substantial effect in preventing harassment. Such training is also unlikely to have long-lasting consequences. Thorough and forcefully presented training is more likely to be effective, and to last longer”.
The EAT also confirmed that the ET was correct to consider the nature and effectiveness of the training stating that “if the training involved no more than gathering employees together and saying “here is your harassment training, don’t harass people, now everyone back to work”, it is unlikely to be effective, or to last”.
There was nothing in this case to suggest that further training of a good standard would not have been effective. It is also worth noting that the employer’s policies in this case were also found wanting with the comment being made that they were not “very impressive even for a relatively small employer”.
In the light of this decision, employers should consider the following key points:
- Employers should ensure that they conduct regular training covering issues relating to equality, discrimination and diversity. The better and more regular this training is the more realistic are the prospects of the employer being able to establish the statutory defence if its employees do commit acts of discrimination. Moreover, the training should help the employer to ensure that such acts do not take place in the first place. Training in small groups, which requires interaction and audience participation with the topics, should have more of a lasting impact than, for example, requiring employees to listen passively to a webinar.
- Conducting training, and then doing nothing else, is unlikely to suffice. Training should not be seen as a tick box exercise. If an employer becomes aware that incidents are occurring which could lead to discrimination complaints, it is crucial that those incidents are investigated and appropriate action taken in response. The employer should then evaluate whether further training needs to be conducted.
- Employers should ensure that they also have policies in place – which are clear and regularly reviewed, updated and communicated to staff – which explain, underpin and reinforce the training which has been delivered. It is important to ensure that these policies are adequately socialised in the workforce – and ideally employees should be provided with copies of the policies, and be required to read those policies, at least annually.
- In reviewing and updating their approach to the prevention of harassment, section 5 of the Equality and Human Rights Commission’s technical guidance on sexual harassment and harassment at work provides useful further guidance on taking steps to prevent and respond to harassment.
An employer’s efforts to maintain, review and improve its initiatives and training around equality, diversity and harassment issues need to be about far more than the narrow defensive technical issue addressed in the Allay case of how an employer can avoid liability for the discriminatory actions of its employees. Employers should continue to seek to ensure that their workforce engages fully with equality and diversity issues – and that the working environment supports individuals such that they feel able to raise complaints or expose incidents of harassment which they suffer themselves, or are witness to.
Whilst appropriate measures may mitigate the risk of successful claims, an employer’s focus and emphasis should be on the positive promotion of a truly diverse and inclusive workplace with consequent benefits in terms of productivity, innovation, and the attraction and retention of talent.
This provides summary information and comment on the subject areas covered. Where employment tribunal and appellate court cases are reported, the information does not set out all of the facts, the legal arguments presented and the judgments made in every aspect of the case. Employment law is subject to constant change either by statute or by interpretation by the courts. While every care has been taken in compiling this information, we cannot be held responsible for any errors or omissions. Specialist legal advice must be taken on any legal issues that may arise before embarking upon any formal course of action.