In March, the coalition referred to the current rules protecting employees from harassment by third parties as ‘unworkable’ and announced that it will be consulting on their removal from the Equality Act 2010.

Eight months on, the rules are still in force and consultation has not started. As European legislation underpins this aspect of the Equality Act, it will certainly not be easy for the government to remove it. It is safe to say that the rules are here to stay for some time. So what are the provisions that have attracted such criticism from the government? How do they work and what do employers need to do to comply?


The legal framework protecting employees from acts of harassment by third parties originates from case law, including the infamous decision in Burton and another v De Vere Hotels Ltd [1997], commonly known as the ‘Bernard Manning’ case. De Vere Hotels was found liable for the harassment of two of its staff who became the subject of the comedian’s racist and sexist jokes during his performance, despite the fact that he was not an employee of the hotel group. Essentially, De Vere Hotels was held liable for failing to take steps to prevent the discrimination complained of from taking place.

Earlier acts, such as the Sex Discrimination Act 1975, did not contain a statutory definition of harassment at all, and employees were forced to bring claims of direct discrimination where they believed they had suffered harassment. Similarly, there were no express provisions dealing with the harassment of staff by third parties.

A challenge led by the former Equal Opportunities Commission resulted in a ruling that the Sex Discrimination Act did not comply with EU law, which led to wide-ranging provisions providing protection to employees from third-party harassment being introduced via the Equality Act, which came into force in October 2010.

With a stated purpose of consolidating and harmonising the law, the Equality Act introduced, for the first time, a common statutory definition of harassment that applies across all relevant strands of discrimination. It also introduced significantly broadened provisions dealing with third-party harassment.

The current rules, set out in section 40 of the act, provide that employers will be liable for harassment where:It is not essential for the alleged harassment to be carried out by the same person. What is important, however, is that the complainant has suffered harassment at the hands of a third party on at least three separate occasions.

  • a third party harasses an employee in the course of the employee’s employment;
  • the employer failed to take such steps as would have been reasonably practicable to prevent the third party from doing so; and
  • the employer knew that the employee had been harassed in the course of employment on at least two other occasions by a third party.

What is harassment?

It should not be forgotten that the statutory definition of harassment is broad and covers various forms of behaviour, ranging from the extreme, such as inappropriate touching and sexual assault, to less obvious acts such as engaging in jokes, flirting or banter which the perpetrator believes to be just innocent fun.

It is the effect on the victim that is important - not whether the alleged harasser intended to cause any harm. It is also not necessary for the behaviour in question to be directed at the complainant. A person can suffer harassment from simply overhearing a conversation between others that he or she should not be party to.

To fall within the statutory definition, the act complained of needs to be related to a relevant ‘protected characteristic’, namely: age; disability; gender reassignment; race; religion or belief; sex; and sexual orientation.

There is no limit as to who may constitute a third party for the purposes of the act, and employers should always be mindful that they could be held liable for the actions of virtually anyone who is not part of their organisation. This includes customers, suppliers, contractors and even members of the general public.

Employers should therefore pay ­particular attention to employees who have external-facing roles. It is clear that businesses which operate in ­certain sectors are more likely to be at risk than others. The Norouzi decision, explained below, is a good example of this.

The ‘three strikes’ test

The Equality Act essentially implemented the much-criticised ‘three strikes’ test that previously applied to claims of sex-based harassment only. There are a number of aspects of it which are not straightforward and could cause problems in practice.

The test requires employers to ‘know’ that an employee has been harassed on at least two separate occasions before they are at risk of being liable.

This could, in the right circumstances, provide employers with a potential loophole to escape liability. For example, it could be argued that an employer did not know about the acts of harassment complained of until it carried out an investigation into the matter and established that harassment had in fact occurred. Attempting to verify an employee’s complaint could be difficult in a number of scenarios, such as where the employee in question routinely travels alone, has a busy, customer-facing role or routinely deals with members of the public.

There may be no internal witnesses or any objective evidence to corroborate the complainant’s story. It is unclear whether or not an employee must prove there was harassment, on at least three occasions, to satisfy the three strikes test, or whether simply raising a complaint will be enough.

The wording of the act suggests the former, but it may be risky for an employer to simply ignore complaints even where it has good grounds to believe they are spurious. This is because the current definition of harassment provided by the Equality Act is exceptionally broad. It may give employees scope to argue that an employer’s inactivity to deal with alleged harassment could in itself be classed as an act of harassment. There are no appellate decisions on this issue under the act. Therefore it is unclear what level of knowledge an employer must possess to attract ­liability in this regard.

Although decided under the legislation before the introduction of the Equality Act, the recent judgment of the Employment Appeal Tribunal in Sheffield City Council v Norouzi [2010] is a useful example of how tribunals might deal with the new law on third-party harassment.

The claimant in this case was an Iranian social worker who worked at a residential care home for troubled children. He was routinely subjected to racial abuse by one of the children residing at the home who mocked and mimicked his accent and made a number of racially offensive statements to him. Mr Norouzi became increasingly upset by the child’s behaviour, went on sick leave and did not return to work.

The council was found liable for harassment on the basis that it had not done enough to protect Mr Norouzi from the treatment that he suffered. The tribunal was critical of the fact that the council should have been more proactive in dealing with the incidents of racial abuse and taken action to remedy the problem. It should have investigated the matter, challenged the child about her behaviour and put in place a more effective support mechanism for Mr Norouzi.

Offering some support to employers operating in certain sectors, the EAT acknowledged that employees with particular jobs may routinely be placed in scenarios where it would be difficult to prevent or stop harassment from occurring, giving the examples of people working in prisons, care homes and schools. What is important to take from this decision, however, is that an employer can still be found liable for third-party harassment where they could have taken reasonable steps to prevent it but did not do so.

Reasonable steps

An employer can escape liability for third-party harassment under the Equality Act where it has taken ‘reasonable steps’ to prevent it. What may be considered reasonable will of course vary from case to case, and employment tribunals will typically consider the size and resources of the employer. Here are some general examples which all employers should consider as a starting point to building a defence under the act.

  • Have a clear policy on harassment, with a specific section dealing with harassment of staff by third parties, and make sure that everyone is aware of it. Having in place robust and up-to-date policies is often considered the first essential step towards building a successful equal opportunities practice, and likely to assist an employer when attempting to demonstrate to an employment tribunal that they take equal opportunities and diversity matters seriously.
  • Where possible, bring your anti-harassment policy to the attention of those that you do business with and display a public notice to remind others how staff should be treated. Quite often, perpetrators may not be aware that their behaviour is causing a problem or are otherwise not mindful of its consequences. Letting them know what is and is not acceptable behaviour could prevent harassment.
  • Do not rely on the victim to ‘push’ for action to be taken. As the EAT recognised in Norouzi, once the employer is on notice that acts of harassment have taken place, there may come a point where the employer is expected to take action to deal with the situation, even where the complainant is not asking for this to be done. Simply ignoring the problem will leave the employer exposed to risk.
  • Investigate the issues and take steps to deal with the problem. What an employer may be required to do in this regard will vary from case to case, but it can include speaking to the perpetrators, where possible, to ask them to stop the behaviour in question. Another option available to the business could be to consider asking the employee if he or she would like to change roles within the organisation.
  • Keep up to date with the law. There are some very real uncertainties as to how the ‘three strikes’ test will operate in practice, and the area is ripe for litigation. Keeping on top of developments in this area will allow employers to understand what is expected of them and to take preventative action to protect themselves from claims before they manifest themselves.

Case study

Sarah has just been hired as a ­receptionist at a busy legal practice. She is the first point of contact for clients of the firm, who often visit the office unannounced, and also the firm’s suppliers.

Within the first week of starting the job she was confronted by an angry man who demanded to see a solicitor immediately, claiming that he had important business to attend to. When Sarah informed him that no solicitors were available and that he ideally needed to make an appointment, he became aggressive and made a number of sexist remarks to her. Later that day she was visited by Steve, who regularly delivers photocopying paper to the practice from the firm’s preferred supplier. He started chatting to her and asked her about her plans on Friday night, wondering whether she would be around for a drink. She politely declined.

She mentions this to one of her colleagues who replies that they regularly have to put up with quite a lot of abuse from clients, and that Steve has a reputation for flirting with female members of staff. She becomes worried about coming back into work the next day and goes on sick leave. As she is new to the job she doesn’t want to inform Catherine, the practice manager, who finds out about it in any event by overhearing a private conversation between colleagues in the kitchen.

Even though Sarah does not raise a formal complaint, Catherine feels that the situation requires looking into. She decides to conduct a formal investigation and gathers evidence from Sarah and her colleagues, before deciding how to act. She is surprised to discover that the longer-serving reception staff are often subjected to this type of behaviour from third parties, but they routinely brush it off and accept it as part of the job. Catherine believes that unless she takes action it is likely that Sarah will be subjected to similar treatment.

Catherine quickly updates the firm’s anti-harassment policy, which she realises is out of date following the introduction of the Equality Act, and distributes it to all staff. The policy encourages staff to report incidents of potential harassment. Notices are placed on the walls in reception to remind customers that abuse of the firm’s staff will not be tolerated and she contacts Steve’s employer to request that he is spoken to about his behaviour. Finally, in view of Sarah’s reaction, she offers Sarah a non-customer-facing role within the firm should she wish to take it, and reminds her that the firm offers a free and confidential counselling service to staff who need support.

Catherine realises that taking these steps will assist the firm in demonstrating to an employment tribunal that it has taken reasonable action to prevent the harassment of its staff by third parties.

Work-related events

Finally, employers should also be wary of the potential for harassment by third parties at events connected to work. One recent example involved a female employee attending a client’s cricket event where she was subjected to sexual harassment by another guest. As her employer could be liable if this is repeated again, it was important that the employer could show it took action.

It is a tricky call in relation to how to approach this when clients are involved, but a decision to contact the client to tip them off on their own client’s conduct was a worthwhile one.

Pam Loch and Dean Jones are partners at niche employment law firm Loch Associates Employment Lawyers