Where an employee is unlawfully harassed (e.g. on grounds of sex or race) by third parties, such as customers of the business, to what extent is the employer liable?
It is only recently (in 2005) that harassment has been categorised as a separate claim under discrimination law. Previously, it was treated as a type of unlawful discrimination. In the case of Burton, decided in 1997, which involved racial harassment of hotel staff by the comedian Bernard Manning while performing at the hotel, the EAT was content to find that the employer was vicariously liable for unlawful discrimination by way of harassment where the harassment had been carried out by someone who was not even an employee. The event in question was sufficiently under the control of the employer that it could have prevented, or at least reduced, the extent of the harassment.

In the later case of Pearce, decided in 2003 and involving the harassment of a lesbian teacher by pupils at the school where she taught, the House of Lords suggested that Burton had been wrongly decided and that an employer could only be liable if its failure to take steps to prevent any harassment was also motivated by the applicant’s sex or race etc.

Now, in Gravell v London Borough of Bexley the EAT has considered the case of a local authority housing officer who alleged that her employer could be vicariously liable for racist abuse to which she had been subjected by customers. She alleged that this was a result of the employer’s policy that staff should not challenge racist behaviour by clients or customers.

The Tribunal had struck out the claim without hearing any evidence on the basis that, following the House of Lords decision in Pearce, the employer could not be made liable for harassment by third parties.

The EAT allowed her appeal. It has said that the decisions under the old laws do not still necessarily hold good. It also said that, if the employer’s policy in practice was as asserted by the employee, the employer might be liable for harassment in that the policy helped create an offensive work environment.

Points to note:

#  The case of Gravell is one to watch. It has now been remitted to the Employment Tribunal for a rehearing, but the EAT is saying that new tests may now be applied by the Tribunals to decide whether an employer can be made responsible for harassment by a third party. We will keep you posted on further developments.

#  However, it does seem that an employer will only be liable if it is aware of the problem and has allowed the harassing conduct to continue on a regular basis. An employer is unlikely to be liable for one isolated incident.

#  Policy documents should be checked to ensure that employees are encouraged to report harassment in the course of their work (whether by colleagues or third parties) and employers should deal with complaints appropriately.