A recent decision of the High Court could lead to employers being liable for acts of customers or clients if they fail to take steps to prevent harassment by third parties. The Employment Equality (Sex Discrimination) Regulations 2005 were designed to implement the 2002 EC Equal Treatment Directive. The Equal Opportunities Commission ("EOC") complained that the implementation was inadequate and did not reflect the aims of the Directive. The EOC also argued that the law was unclear and both employers and employee need clarification of their rights and duties. The High Court judgement of 12 March partially upheld the EOC's arguments.
In summary:

#  Illegal harassment need only be related to a party's sex. Unlike discrimination, it need not be caused by it;

#  Comments directed to one person may be harassment of another;

#  Employers may be liable for discrimination of their staff from customers, clients or visitors; and

#  A pregnant woman cannot be compared to a non-pregnant woman or a man.

The EOC's first claim, regarding discrimination, was that a causation test had been illegally introduced because the new definition under the Regulations states that harassment only arises where a woman is subjected to behaviour "on the ground of her sex". By contrast, the Directive merely requires that conduct is "related to" the sex of a person and therefore it is the association with sex, rather than causation by it, which defines harassment. The EOC argued that, legally, causation is only required when seeking to prove discrimination, not harassment. The Court agreed with this and held that the new law needs to be amended to eliminate the need for causation. Its interesting to see that, in this case, the Court felt that it would have been a stretch too far to make the Regulations fit with the Directive and so recommended that the Regulations be amended.

In relation to harassment, the EOC argued that the Regulations require that the unwanted conduct be directed at the complainant, when the Directive does not require this and would seem to cover a situation where behaviour directed at a third party has the effect (if not the purpose) of creating an intimidating or humiliating or offensive environment for the claimant. The Court ruled that the law should also be amended here to reflect the fact that there could be harassment of a woman even where conduct was not directed at her.

The Court did however reject an additional argument from the EOC and confirmed that harassment could be established by an objective rather than subjective test.

Importantly, the EOC claimed that the Regulations failed to make employers vicariously liable for discrimination by third parties such as customers, clients or visitors and thus failed to implement the Directive. The Court ruled that the law should be changed to allow vicarious liability of an employer for failing to take steps to prevent harassment by third parties. Employers will have to be aware of a possible change in their obligations here as previous cases had held that employers did not have such liability.

In relation to pregnancy discrimination, the EOC argued that the Regulations incorrectly introduced a comparator for the purposes of establishing discrimination on the grounds of pregnancy (i.e. that a pregnant woman will be discriminated against if she is treated differently to a non-pregnant woman or a man). The EOC argued that this was contrary to previous case law and thus impermissible. The Court agreed and said that the Regulations should be amended to remove the need for a comparator.

The Government has since indicated that it has decided not to appeal against the judgement and will make appropriate changes to the Regulations.