Responsibility lies with employers

Non-disclosure agreements cannot be used to silence complaints about unlawful behaviour, says Chris Phillips

Reports of the lewd and offensive conduct of guests during the President’s Club dinner provoked outrage, political condemnation and reignited debate around legal liability of employers for discrimination and harassment.

So who can be held responsible for the conduct of guests and clients at such events? It’s well established that employees can raise claims against their employer in the Employment Tribunal under the Equality Act 2010 when subjected to discrimination and harassment. Direct sex discrimination occurs when someone is subjected to less favourable treatment because of their gender.

Employees can also raise claims against a business under the Protection from Harassment Act 1997. This may be applied to ‘misbehaving’ event guests, in addition to criminal law where conduct amounts to sexual assault.

Sexual harassment occurs when an individual is subjected to unwanted sexual behaviour which has the purpose or effect of violating their dignity or creating an intimidating, hostile, degrading, humiliating or offensive environment. ‘Harassment’ must include a series of at least two separate acts or incidents. Therefore, an isolated incident at a charity dinner, of which the employer is unaware, may not lead to a valid claim.

Before Section 40 of the Equality Act 2010 was repealed in October 2013, employers could be liable for harassment by third parties if they were aware of at least two previous incidents of harassment and had failed to take reasonable steps to stop this. The repeal of section 40 meant bringing claims against businesses for the misconduct of their clients became more difficult. Companies can also be held vicariously liable for harassment carried out by their employees, unless they show reasonable steps were taken to prevent it.

Yet, when it comes to guests at an event, the law offers less protection and this is further complicated when the victim is an agency worker, not an employee.

In 1997, an employer was sued by two black waitresses who had been subjected to hearing racist jokes made at a dinner by comedian, Bernard Manning. The company was found liable for race discrimination against the waitresses because it did not take steps to protect the women from the sexist and racist remarks. Subsequent cases have determined that an employer should not be liable, unless the Tribunal precisely identifies steps that should have been taken to prevent the harassment.

Whilst the President’s Club hostesses were engaged as agency staff, agency workers are still afforded legal protection against discrimination by the end-user’s clients. The agency in question reportedly insisted staff follow a dress code including “short black dresses, matching underwear and sexy heels”. That wouldn’t help establish a defence that they took ‘reasonable steps’ to protect hostesses from harassment.

Guests were reportedly warned to “look after” the hostesses and the programme included a note for patrons warning against harassment of staff. These measures are unlikely to be sufficient given the staff in question were allegedly provided with alcohol before their shift and instructed to drink and flirt with guests.

The hostesses were allegedly

0 The President’s Club hostesses were engaged as agency workers but they are still afforded legal protection against discrimination by the end-user’s clients required to sign five-page non-disclosure (NDA) agreements prior to their shift, without being given a copy to keep.

NDAS are normally used to prevent staff sharing company information such as trade secrets or sensitive financial data. They are used in the catering industry for big events involving celebrities, like Royal engagements. However, they cannot be used to silence complaints about unlawful behaviour. A worker can only waive rights to bring statutory

claims such as sexual harassment by signing a settlement agreement.

It is unlikely a Court would uphold any NDA seeking to prevent disclosure about discrimination, harassment or criminal conduct.

Theresa May is now reportedly considering a governmental review on the application of NDAS by employers. Lessons for Business: There is a statutory defence available to employers if they have taken ‘all reasonable steps’ to prevent harassment from occurring. While it is impossible for an employer to control the actions of third parties, a business can avoid liability by ensuring it has robust policies on discrimination and harassmentandensuringthatallstaff and contractors are aware of these policies or given necessary training.

When an organisation does receive a complaint of sexual harassment from a member of staff or a contractor, the allegations should be taken seriously and investigated fairly and thoroughly.

Employers who victimise staff for raising complaints or dismiss unwanted sexual remarks as office ‘banter’ are likely to find themselves the subject of costly and damaging claims. Chris Phillips is accredited by the Law Society of Scotland as an employment law specialist