Employers may be relieved to learn that as from 1 October 2013, provisions in the Equality Act 2010 imposing liability for third party harassment will be repealed in accordance with The Enterprise and Regulatory Reform Act 2013 (Commencement No. 3, Transitional Provisions and Savings) Order 2013. This will represent a continuation of the introduction of the Government’s reforms to employment law aimed at encouraging employers to hire and retain more staff.
Sections 40 (2) and 40 (3) of the Equality Act 2010 have the effect of making an employer liable where a third party harasses an employee in the course of his employment, provided that the employer knew of the harassment having taken place (at least on two occasions) but failed to take reasonable steps to prevent it. These sections will no longer be in force as from 1 October 2013 (however an employee will still be able to make a claim if the harassment occurs before this date).
Whilst this is clearly a step towards reducing the ‘red tape’ placed on employers which the Government has been keen to do as a means to support and encourage economic recovery, employers should still beware: an employee who has been harassed by a third party may still bring and succeed in a claim against their employer albeit under different laws. Under section 26 of the Equality Act 2010 (which will remain in force), a person harasses another if they are engage in ‘unwanted conduct’ related to a ‘protected characteristic’ (age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex and sexual orientation). It is conceivable, therefore, that an employee may argue that an employer’s failure to protect him or her from third party harassment amounted to ‘unwanted conduct’ which created an intimidating, hostile, degrading or humiliating environment for him or her. If such an argument was advanced and was accepted by the courts, employers may, in fact, still fall foul of the Equality Act 2010 and find themselves liable for third party harassment.
In the meantime, however it seems that the position will once again be that an employer will only be liable for third party harassment if their failure to prevent such harassment was motivated by a discriminatory reason. Accordingly, the employer’s conduct must meet the statutory definition of discrimination before it becomes unlawful. This reversion to the position as stated in Pearce v Governing Body of Mayfield School; Macdonald v Advocate General for Scotland  ICR 937 (HL) may provide comfort to employers, however, as explained above it is important to bear in mind that liability for third party harassment has not disappeared entirely. It is therefore vital that employers ensure that they act on any allegations of harassment, whether against other employees, customers or clients, and ensure that they take reasonable steps to prevent these from reccurring.