Racism and assault: the scope of employer liability

Many readers will be familiar with tales of drunken episodes at parties, which result in consequences ranging from an embarrassing hangover to serious disciplinary proceedings. However, these two cases serve as seasonal reminders that employers can also be held liable for the actions of individuals in circumstances well beyond the standard employment relationship.

What is also evident, particularly from the second case, is the need for employers to have effective investigation processes in place, and take advice when complex issues arise which might become a risk issue.

Bellman v Northampton Recruitment Ltd

In October 2018, the Court of Appeal (CA) unanimously allowed the appeal of Mr Bellman, ruling that his employer was jointly liable when he was assaulted by the Managing Director during a post-party drinking session at a hotel near the party venue.

At around midnight, as the Respondent’s party was ending, the MD paid for taxis to take some colleagues to the Hilton Hotel for further drinks.

Around 2am, work discussions turned into a lecture from the MD “laying down the law” in an “explicit assertion of his authority, vehemently and crudely expressed by him” to junior colleagues. He expressed in an aggressive tone that he owned the company and made all the decisions. When questioned about this by one employee, Mr Bellman, the MD repeatedly attacked him, leaving him severely disabled.

The High Court determined that the company could not be held vicariously liable for the actions of the MD because the assault took place after the organised work party and the MD was not strictly working during this time. The timing of the assault after the official work function played a key role in this outcome. However, the CA overturned this decision, finding that the company was liable because there was a sufficient connection between the MD's “field of activities” and the attack.

Of course, each case will depend on its facts. The CA did emphasise that liability will not arise in every situation when an argument between an employee and a more senior colleague leads to an assault. “This case is emphatically not authority for the proposition that employers became insurers for violent or other tortious acts by their employees."

The key point in this case was for the CA to consider the context in which the drinks party had occurred when the attack happened and not just the timing of it. It is important for employers to be aware of this when incidents occur between colleagues after an official event: "Misuse of authority can occur out of hours or when the parties are off-duty, particularly by someone in a senior position".

Jayeola v Commissioners for HMRC

Liability is not always limited to the actions of employees. Organisations can also be held accountable for the wrongdoings of the contractors that they engage, if they do not respond to the complaint in a reasonable way – as the recent case of Jayeola v HMRC demonstrates.

The Claimant, Mr Jayeola was an HMRC employee who was subjected to a racist insult when an external contractor remarked to him during an office power cut that: “it’s a good thing you are wearing a white shirt or I wouldn’t have seen you”.

When the Claimant raised a complaint, HMRC informed him that they considered it was a matter for the external contractor to discipline their employee about. He asked HMRC not to work alongside the contractor.

HMRC addressed this complaint by arranging diversity and inclusion training sessions for colleagues and circulating a reminder of the company’s diversity policy. However, HMRC did not conduct any investigation into the incident. The external contractors simply informed HMRC that they had interviewed their employee and reminded him of the equality and diversity policy.

The Tribunal criticised HMRC’s approach, finding that it had inadequately investigated the incident. The Tribunal held that HMRC had discriminated against Mr Jayeola because the company would have taken steps to ensure that the contractor did not work in the same place as a hypothetical white comparator of Mr Jayeola, given the importance they said they placed against their diversity policy. He was awarded £26,646, which included the sum of £15,000 for injury to feelings.

This is an interesting case, particularly in light of the repeal of the provisions in the Equality Act where employers could be held directly liable for the actions of third parties. In this case, the inadequate investigation and the failure to remove the contractor from working with the claimant were the key factors in finding that discrimination had taken place.

Comment

It may come as no surprise to read that many harassment complaints involve some element of out-of-hours socialising, office parties or work trips combined with alcohol. With a heightened awareness of rights and greater willingness to speak up in a post #metoo world, we are seeing an increase in employees reporting incidents.

As well as setting expectations around behaviour employers should ensure they investigate seriously any complaints arising. This may require a different approach in relation to third parties but reasonable steps should still be taken.

As a first step employers should look at the supply of services agreement between themselves and the organisation employing the contractor, to understand what the complaints process may involve. In the Jayeola case, HMRC should have carried out their own investigation. Where statements are required from contractors, attempts should still be made to obtain them. If statements are not forthcoming, it may be necessary for an employer to make a decision on the best available evidence. The tribunal noted here that there was a witness to the racist incident, who was employed by the Respondent, but who had not been interviewed.

The tribunal were also critical of the approach the employer took here which required employees having to come forward with formal complaints to “police the effectiveness” of the diversity policy. This was particularly so in light of the Respondent’s purported zero tolerance approach to a breach of the policy. Instead, the tribunal made a finding of fact that the employer paid only lip service to this zero tolerance approach. This case highlights the risks that can arise when employers fail to be joined up in their approach to dealing with diversity and harassment.

We have a number of training options for employers looking to upskill their staff in carrying out investigations. Please contact your usual CMS contact for more information.