In the post-Presidents Club world, and in light of the #metoo movement, harassment has become one of the big legal and moral issues affecting societies across the globe, and calls for enhanced legislative protection have been growing. Most recently, the voice of British business, the CBI, joined those seeking protection in one specific area - harassment by third parties. The CBI's call comes on the back of July's detailed report by the House of Commons Women's and Equalities Committee, the 5th Report - Sexual harassment in the workplace, which looks into harassment from a number of different perspectives. One of the report's many recommendations was for legislation on third party harassment. So what is the current position, and why the call for change?

Whether an employer should be liable for acts committed by other people has long troubled Parliament and the courts. Before 2003, the position was pretty straightforward: employers were liable if they failed to prevent harassment taking place. The best example is the well-publicised litigation involving the "comedian" Bernard Manning, who was booked as evening entertainment, but "entertained" by abusing black waitresses who were working for the hotel at the time. This was held to be race discrimination (harassment was not separately dealt with in the Race Relations Act at the time, so the case proceeded on the basis of direct discrimination).

This settled position was overturned by the House of Lords in 2003, ruling that an employer could only become liable if it had a discriminatory motive for failing to prevent the noxious treatment. In most cases, of course, that motive would be missing and / or near impossible to prove. The courts then moved the Government to deal with the risk of harassment by non-employees, by holding in 2007 that the law did not adequately implement the EU Equal Treatment Directive, that underpinned the various pieces of UK anti-discrimination law. However, the ruling only affected sex discrimination, so that the amendments to the Sex Discrimination Act, while beneficial to some claimants, left all the other protected groups unprotected in this area.

This was addressed in 2010, when the Equality Act brought together all the strands of discrimination law into one place, and adopted the wording of the Sex Discrimination Act to deal with all of the protected characteristics. Thus, employers were now squarely liable for the acts of a third party - but only in some circumstances. The caveats were problematic. Firstly, the wording adopted a "three strikes" model, so employers were only liable if the individual had been harassed on at least two prior occasions. Furthermore, the employer had to “know” about the previous incidents, but what counted as “knowledge” was not explained. Is knowledge assumed when something is alleged? Or, only if you witness it yourself? Or, if it is admitted? What level of certainty will do? That lack of clarity was criticised from across the political spectrum, and allowed this well-intentioned protective legislation to acquire somewhat of a bad reputation, which allowed the Coalition government to repeal the provision in 2013.

At the time, it was presented that the repeal left employees in no worse position, because a number of other legal methods of redress were still available. The argument was presented that: the common law already dealt with third party harassment, because of an employer's general duty of care, which encompasses a duty to protect employees from reasonably foreseeable harm; that health and safety obligations would protect employees; that the Protection from Harassment Act provided a remedy; and that the anti-harassment provisions of the Equality Act covered harassment by third parties as well as by colleagues or managers.

Despite those assurances, in reality there are formidable obstacles in the way of an employee seeking to rely on health and safety or common law duties in this area. Risks must be obvious and foreseeable, which can be very difficult where the harassment comes from a client or customer who the employer and / or employee have never encountered before. The Protection from Harassment Act was originally designed to deal with stalking, and although there have been some successful claims under the Act, the costs and evidential burden on claimants is much higher than in the Employment Tribunal.

Significantly, the Court of Appeal earlier this year ruled, in the clearest possible terms, that s.26 of the Equality Act, which outlaws harassment in general, does not cover acts committed by third parties. Racial abuse by customers, sexist remarks by secondees, homophobia by contractors, or anti-Semitism from clients are all apparently unprotected.

Hence the calls for new legislation. It is easy to see the attraction of specific protection for employees exposed to discriminatory harassment, wherever that harassment comes from. What is more difficult is balancing the desire to protect employees with the need to punish employers, only where they are in some way culpable. It is inherently unfair to impose liability on someone who has not themselves committed a discriminatory act, so the circumstances in which liability can be imposed need to be closely defined. This is already done in the law of vicarious liability, although identifying a clear set of rules in that area of law has been notoriously difficult. It must be hoped that any new legislation on third party harassment, produces clear, fair and workable rules, that protect employees without unduly punishing innocent employers.

{Government must reinstate Section 40 to protect employees against harassment

The Government should reinstate Section 40 of the Equalities Act 2010 to protect employees against harassment by third parties, the CBI’s Director-General will say.