The Court of Appeal held that failure of managers to do enough to prevent harassment by a third party was only a breach of the Equality Act if the manager had a discriminatory motivation. Howerer in the present case the union was liable anyway because the harassment was by officials who were its agents. Also the claim for constuctive dismissal succeeded.
Court of Appeal, [2018] EWCA Civ 1203 www.bailii.org/ew/cases/EWCA/Civ/2018/1203.html. Also EAT (bailii.org), 2016.
Facts
An employee of the union suffered sexual harassment by elected officers of the union who were not employees.
Held by the Court of Appeal: The union was liable under the Equality Act (EqA) for the harassment but its officials, since they were the union’s agents. However the failure by her managers (who were employees of the union) to do enough to prevent the harassment was not necessarily unlawful discrimination or harassment.
Liability for officials as agents of the union
The employee succeeded in her claim that the union was liable for these acts of its elected officers as agents, under s.109(2) EqA.
Employment Appeal Tribunal (EAT)
The EAT held that the officials were not “employees” within the EqA definition. They did not contract personally to do work. Nor did the rule book place elected officials in a position of subordination.
As to whether the officials were agents within s.109(2) EqA, the employment tribunal (which found that they were within it) had been right to take as its starting point the Court of Appeal decision in Ministry of Defence v Kemeh. The legal concept of agency could not be disregarded. The tribunal must therefore have regard to what, if anything, the putative agent was authorised to do. However, it was not essential that the agent should have authority to bind the principal contractually. Estate agents, for example, do not have that authority, but still carry out functions on the principal’s behalf. On the other hand, as illustrated by Kemeh, it is not enough that a person performs work for the benefit of a third party employer. S.109(2) applied only where “the agent discriminates in the course of carrying out the functions he is authorised to do” (Kemeh).
Here the sexual harassment by elected officials generally took place in the context of meetings, such as a meeting with Heathrow Airport managers, in pay negotiations and on other occasions with Heathrow Airport negotiators, and in a meeting with Heathrow Airport chairs and convenors. One official also wrote to Heathrow Airport informing them that the claimant was no longer to act on behalf of the members of his branch in any capacity.
The EAT considered the decision of the House of Lords in Heatons Transport v TGWU, on the wide authority held by (TGWU) shop stewards. The EAT held that in the present case, the tribunal was entitled to find that the elected officials were acting as agents for the union because they were carrying out work on its behalf in their dealings with local members, officers, other trade unions and employers. The union authorised its officers to act on its behalf in a variety of ways – conducting branch meetings, representing the union at meetings with other unions and employers, liaising with paid officers and holding internal meetings to prepare for external meetings.
Accordingly the tribunal was also entitled to find that the elected officers were acting within the scope of their authority as officers of the union when speaking at meetings concerning matters to be negotiated with Heathrow Airport, and when corresponding about such negotiations.
Discrimination being contrary to union policy
The union argued it could not be responsible for the acts of the officials because they were contrary to union policy.
S.109(3) states that it does not matter whether the thing is done with the principal’s knowledge or approval. Accordingly, said the EAT, it does not matter that the specific words and conduct amounting to sexual harassment were not approved by the union or even known in advance, if the perpetrators were acting on behalf of the union within the scope of the authority vested in them to do so. That seemed to be the position here. The EAT went on:
A principal cannot avoid responsibility for acts done with his authority merely by saying to his agent “Of course you must not do anything illegal” or (in the context of the Equality Act) “Of course you must not do anything against equality law”. Such a statement does not limit the scope of the agent’s authority to act on the principal’s behalf. It merely spells out the obvious: the principal does not approve if he carries out authorised functions in an unlawful manner. But the fact that the principal would disapprove does not prevent the agent’s act being treated as done by the principal: section 109(3).
So the EAT upheld the tribunal’s judgment that the union was liable for sexual harassment of the claimant by its elected officers.
Court of Appeal
At this stage, the union accepted that the elected officials were its agents, and that the acts complained of were done by them in the course of functions which they were authorised by the union to perform. However, the union argued that to fall within s.109, the acts also had to be towards third parties, because it was only in relation to such acts that the officals could be said to be acting (in the language of s.109(2)) “with the authority of the principal”.
The Court of Appeal disagreed. The starting point was the statement in Ministry of Defence v Kemeh that the effect of s.109(2) is that “the principal will be liable wherever the agent discriminates in the course of carrying out the functions he is authorised to do”. If this was the effect of s.109 EqA, the court could see no justification for limiting that liability in the way proposed by the union. The court said:
An agent may stand in the shoes of the principal in dealing with A, but if while wearing them he treads on B’s toes I see no good reason why he should not be liable to B just as much as if it had been A’s toes that were crushed: in both cases the wrong is done in the course of performing the authorised functions.
The union’s argument – based on Bowstead and Reynolds, a book on agency – that it is inherent in the principal/agent relationship that the agent be in a position to affect the principal’s legal relationship with third parties missed the point that the court was not here considering whether an agency relationship existed at all. The court was considering liability in tort for acts done in the course of it.
[More on s.109 EqA: Who is liable under the Equality Act?>Agents].
Whether liability for failure to prevent harassment was a breach of the Equality Act
Focus on motivation of decision-maker
Here the claimant was able to claim compensation on the basis that the officials were agents of the union (above). However, perhaps in case that argument failed, she also claimed that the union was liable for harassment or direct discrimination in that her managers, who were union employees, failed to act sufficiently firmly and decisively against the harassment, despite her complaints about it. (The union had just proposed to transfer her elsewhere.) On this issue, the case is important as to how far an employer is liable if it fails to take steps against harassment by third parties such as customers or suppliers who are not the agents of the employer.
The Court of Appeal said that the harassment by the union officers was related to sex, but this did not mean the managers’ failure to take action against it was related to (or because of) sex. The tribunal had to look at the motivation of the managers. The employer – and indeed the individual decision-taker – would be liable for harassment or direct discrimination under the EqA if the mental processes of the decision-taker(s) in failing to act were found (with the assistance of the shift in burden of proof if necessary) to have been significantly influenced, consciously or unconsciously, by the relevant protected characteristic.
The court reached this conclusion by considering what “related to” means in s.26 EqA, ie in the definition of harassment …
“Related to” is intended to be wider than “because of”
The court considered how the “related to” wording of s.26 EqA came about. Pre-2008 sex discrimination legislation required that the harassment be “on the ground of” her sex, so it required a “causative” relationship. (The EqA would say “because of”, meaning the same as “on the ground of”.) However, the relevant EU directive described harassment as conduct “related to” someone’s sex, an “associative” relationship. Accordingly, the High Court in Equal Opportunities Commission (EOC) v Secretary of State for Trade & Industry, 2007 (see from §55 of the Nailard judgment) held that British sex discrimination legislation did not comply with the EU directive. The High Court in the EOC case gave three examples of situations which it accepted fell within the European “related to” wording, but outside the British wording (§56 of Nailard):
- an RAF NCO had used offensive and obscene language in front of a group of male and female staff but which was peculiarly offensive to the women
- the claimant had been unfairly treated by a manager who was jealous of her sexual relationship with a colleague
- a manager “barged into” a female toilet but would equally have barged into a male toilet.
In response to this High Court decision in EOC, in 2008 the government by regulation changed the sex discrimination wording from “on the ground of” to “related to”. Two years later, Parliament used that same wording when defining harassment in respect of protected characteristics more generally, in s.26 EqA 2010.
The Court of Appeal in Nailard said it must at least have been the intention both of the government in 2008 and of Parliament in 2010 to ensure that what was now s.26 EqA applied in cases where the High Court in EOC had held that the “on the ground of” language did not (or arguably did not) reflect the requirements of the Directive. So the change must have been intended to ensure that the definition of harassment in s.26 covered cases where the acts complained of were “associated with” the protected characteristic, as well as those where they were “caused by” it, as illustrated by the three examples above. (§92 of Nailard).
The Court of Appeal in Nailard commented that it was inclined to doubt whether it had been strictly necessary to change the wording to “related to”, as the High Court in the 2007 EOC case had required. The distinction made in EOC between an “associative” and a “causative” relationship may not be essentially different from the two types of discrimination set out in the Amnesty case (inherent in the act, or based on mental processes). For example, where a speaker uses overtly sexist language in a mixed audience, the link with the protected characteristic is in the words themselves and does not depend on the speaker’s motivation. However, the Court of Appeal did not have to decide on this (§93).
… but “related to” is not wide enough to cover failure to protect against third-party harassment, irrespective of motivation
The claimant in Nailard argued that in making the change from “on the ground of” to “related to”, the government and then Parliament also intended to include liability for third-party harassment, another issue discussed by the High Court in EOC.
The Court of Appeal said the EOC case did not decide third-party harassment had to be covered by British law, and in any event the legislation in 2008 and 2010 had covered it through a separate provision, distinct from the “related to” wording (§96-97).
Further, the words “related to” were not sufficient to convey an intention that employers who were themselves innocent of any discriminatory motivation should be liable for the discriminatory acts of third parties, even if they could have prevented them. The Court of Appeal said the “associative” effect of the phrase “related to” was more naturally applied only to the case where the discriminatory conduct is the employer’s own, as in each of three examples given in the EOC case. Negligent failure to prevent another’s discriminatory acts was a very different kind of animal from liability for one’s own: it required careful definition, and the Court of Appeal would expect it to be covered by explicit provision. The court would also be uneasy about a situation where such liability was incurred not only by the employer but also by any individual employee who might be implicated in the failure to afford adequate protection. (The court may have had in mind an example it quoted from an earlier case: if the manager had had a heart attack which hospitalised him immediately after receiving the complaint from the claimant, and that was in truth the reason for his not dealing with the complaint, then on the claimant’s argument he would nonetheless have to be condemned and his employer with him as having acted in a discriminatory manner.) (§98, §76)
Accordingly, as set out above (Focus on motivation of decision-maker), EqA liability in this type of case depends on whether there is a discriminatory motivation.
Constructive dismissal
The claimant also claimed constructive dismissal, having resigned when the employer proposed to transfer her.
The employment tribunal upheld this claim and it was not appealed (EAT decision (bailii.org) at §10). The tribunal found the union’s failure to deal firmly and decisively with the officers concerned was a breach of the implied term of trust and confidence; it said the decision to transfer her was the “last straw”. Quite apart from the EqA, the claimant was therefore entitled to compensation for unfair dismissal.
My comment
For harassment occurring before 30th October 2026, this case limits the circumstances in which an employer is liable under the EqA for harassment by third parties such as customers or suppliers. For harassment of employees on or after that date, s.40 EqA is amended to make claims easier. See Harassment by third parties.
Even where those amendments do not apply, other types of claim may sometimes be available, such as constructive dismissal (as was successfully claimed in this case) if the claimant has left, indirect discrimination under the EqA, or a claim under the Protection from Harassment Act 1997. See the same link.
