We all like a good chuckle – even the high-minded hacks on the Gazette have been known to engage in badinage. But when does good-natured banter cross the line to become grounds for a discrimination or harassment claim? When does a joke stop being funny?

The answer to that last question is when it causes offence. Context is everything and if an individual feels uncomfortable or intimidated by the jokes, and if the individual makes his or her feelings known, then the office wit should put a sock in it. Or risk lumbering their employer – and in some circumstances themselves – with a tribunal claim for harassment.

But what about the more problematic areas that are encountered in the office? For example, is it OK to call your Afro-Caribbean colleague ‘black’, but an offence to call him or her ‘coloured’? Is swearing in the workplace acceptable? Can you be done for anonymously sending a colleague a card and a box of chocolates on St Valentine’s Day?

Magic circle firm Allen & Overy (A&O) asked 1,000 workers all these questions and, in a report shown to the Gazette this week, but not yet published for general distribution, found that most employees did not know the answers – or at any rate, did not know the complete answers.

This was a worrying finding given that the average tribunal award for race discrimination, for instance, is £102,259 – payable not only by the employer, but in some circumstances shared by the employee as well. It pays to get these things right.

A&O reports that 80% of the 1,000 UK workers surveyed believe that they can easily draw the line between banter and unlawful behaviour, but this is not borne out by their responses.

Some 50% of respondents say that the term ‘coloured’ is offensive to a person who is wholly or partly of non-white descent, while 38% say it is acceptable. In fact, ‘coloured’ is now generally considered offensive, with the preferred term being ‘black’. But it is not clear cut: some black workers will not be fazed at all, some may even use the term themselves, while still others will be deeply offended.

The latter, who feel strongly about the use of the term, should first make it clear that ‘coloured’ is offensive to them. If a colleague continues to use it, the offended party would have three elements for a strong harassment claim: the conduct is unwanted; it causes offence; and it relates to the protected characteristic of race.

Some 65% of the 1,000 respondents said that swearing could not be unlawful, and yet the A&O report says that if swearing is ‘persistent or targeted’ or used by a boss as a ‘means of control’, it can amount to a breach of contract. Tribunal awards for this offence can range from around £10,000 to more than £100,000.

Even the gesture of anonymously giving a colleague, male or female, a St Valentine’s Day gift can amount to sexual harassment where the conduct is unwanted. This could arise, for example, where a co-worker has told an admirer that he or she is not interested, and yet the lovesick optimist persists in his or her pursuit. The average tribunal award for this offence is £9,940, which makes it a very expensive box of chocolates.

The A&O report concludes with the statistic that 55% of workers had read their employer’s ‘dignity at work’ policy, and yet only 38% of them had received training on it. The report says that an ‘all reasonable steps’ defence would require an employer to do more than just have a policy on a shelf or on its intranet. It says: ‘Workers need regular training on its implications and their legal liability. Managers need to understand its contents, how it operates, and how to lead by example.’

Given the commercial imperatives of keeping a laugh and a joke within acceptable bounds, it is strange that businesses – law firms included – have not made dignity at work central to their practice. It has become commonplace to decry the ever-growing willingness of employees to resort to tribunals with ‘vexatious’ claims, but some employers are just asking for trouble.

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