Most sex discrimination claims in the Employment Tribunal are brought against either the employer alone or the employer and the individual said to have discriminated. This is because an employer is nearly always vicariously liable for the discrimination and has the money to pay the compensation.
But, ‘nearly always’ is not the same as always. Employers have a statutory defence enabling them to avoid vicarious liability if they can show they took all reasonable steps to prevent discrimination. And sometimes the claim cannot be brought against the employer at all. The case of Hurst v Kelly UKEAT/0167/13/DM is an interesting example of this situation.
The employee and the respondent were employed at the same call centre. The respondent was the employee’s line manager. In September 2010, the employee ceased to work at the call centre. She entered into a compromise agreement with the employer, preventing her from bringing a claim against it.
She later brought a claim for sexual harassment against the respondent only, regarding events which, she claimed, had occurred at work functions. The claim was dismissed by the Tribunal on the grounds that the employer was not a party to the claim. Her appeal succeeded.
The Tribunal had relied on the fact that the Sex Discrimination Act* referred to ‘Discrimination by Employers’ leading it to consider no liability attached to an employee. The EAT rejected that approach considering an employee was also liable as an aider and abetter even if the employer escaped liability by way of the statutory defence. This had already been concluded by the EAT in the case of Barlow v Stone UKEAT/0049/12 to which the Tribunal had not been referred.
As the employee’s liability was freestanding, there was no requirement that the employer had to be a party to the complaint to enable the Tribunal to deal with it.
The existence of the compromise agreement made no difference to the situation. It meant the claimant could not pursue a claim against the employer but did nothing to prevent a claim against the employee although the payment made under the agreement might prove relevant in assessing compensation if there was any overlap.
That relatively simple (and on the face of it equally obvious) result leads to the risk of some potentially tricky problems.
The terms of the compromise agreement are of critical importance. Standard forms of compromise agreements (now renamed settlement agreements) aim to cover all conceivable claims against both the employer and its employees.
It is unclear how or why this agreement failed to do so and I suspect many lawyers (me included) will be scurrying around double checking our files.
Assuming a claim may be brought against an employee, there may also be scope for the employer to end up being liable if the employee can successfully claim an indemnity.
For example, if the discrimination was the application of the employer’s policy so the ‘offending’ employee was simply doing what s/he had been instructed to do, s/he might well say that any claim should be met by the employer.
That would rarely succeed in a sexual harassment case but if there was a culture of banter and jokes which was tolerated or perhaps even encouraged by managers, the position might well be different.
All told, for employers facing the prospect of these claims, it is essential to ensure any settlement deals with claims against employees too.
For Claimants, even after settling, check the wording carefully as you may still able to pursue the individual culprit.
*Note that s110 of the Equality Act makes the personal liability of employees explicit so the same problem should not arise in the future but also means it is important to deal with both personal and vicarious liability in settlement agreements.