Presidents Club scandal should lead to better protections for employees, say legal experts

29 Jan 2018 By Emily Burt

Legislation offering statutory protection against third-party harassment was repealed in 2013

The scandal around the Presidents Club dinner, at which female employees were reportedly harassed during a high-profile charity event, should ‘spur’ the government to reinstate employer liability for third-party harassment of employees, legal experts have said. 

The event highlighted the gap in legal protection for employees harassed by third parties at work, according to commentators.

Although the event itself did not involve employees directly, under current employment law, employers cannot be held liable for harassment of their employees carried out by third parties should it occur in the workplace.  

This gap in the law for employees, or protection of employers, is relatively new and deliberate. 

Until 2013, employers could be found liable for harassment by third parties on their property under section 40 of the Equality Act 2010. Provided the employer was aware of at least two previous incidents of its employees being harassed by a third party, and could be found to have failed in taking reasonable steps to prevent them, the employer could be liable for the incidents. 

A consultation by the coalition government in 2012, however, deemed this section an “unnecessary regulation introduced without any real or perceived need”, and removed the specific protection for employees through the Enterprise and Regulatory Reform Act 2013, citing a £300,000 saving from removing the legislation. This meant that employers could no longer be held liable for harassment of their employees carried out by customers, clients or visitors. 

Stefan Martin, employment partner at law firm Hogan Lovells, told People Management: “It is slightly bizarre that those specific provisions were repealed so quickly – I suspect it was felt third-party harassment was not a sufficient enough evil to merit specific legislation. 

“There were very few successful cases under the legislation as it was in for such a short time, and since the repeal of those provisions there have been very few, if any, successful cases.”  

While employers remain vicariously liable for any actions of harassment carried out by their employees, the legal responsibilities of employers with regard to third-party behaviour remains conflicted because of the lack of legislation, barrister at cloisters and employment discrimination expert Anna Beale told People Management

“There is no explicit statutory protection over third-party harassment because of the repeal of section 40 of the 2010 Equality Act,” she said. 

“There may be a legal argument that where a public authority is responsible for an employee who has been harassed, an individual could rely on European law, where a directive says an individual must be protected in these circumstances. However, this is likely to be a difficult argument given that section 40 was specifically repealed by parliament.” 

Martin agreed that it would be difficult to find employers at all liable for incidents of third-party harassment under existing legislation, unless an employee could prove they had repeatedly offered proof of harassment to their employer and no action was taken.

“Case law since the 2013 repeal has made it clear that it’s difficult – not impossible, but very difficult – for an employer to be held liable for the actions of a third-party member harassing their employees,” he said. 

“Essentially, for there to be any liability at present, there would need to have been complaints made to an employer and an employer’s act in not addressing those complaints would have to be treated as harassment itself, or the creation of a hostile working environment.”

But “there have been very few, if any, successful cases so, for there to be a reasonably easy route for a claim, there would have to be new legislation, or case law would have to change quite dramatically”, Martin said.  

Last week, gender equality charity the Fawcett Society released a review of current sex discrimination law, calling for the reinstatement and update of the 2010 legislation on third-party harassment, as part of a wider effort to create a more gender equal workplace. 

Trade union Unite and Tory MP Maria Miller, chair of the parliamentary women and equalities committee, have both called for tougher legislation on third-party harassment in the wake of the Presidents Club event. 

“The [Fawcett] report suggested not only bringing back a third-party harassment section, but making it more favourable to the employee – the 2010 legislation required evidence of two previous incidents of harassment to bring a case, which we suggested reducing to one,” Beale said. 

“This is an important situation that the Presidents Club should bring to the fore. There were some written prohibitions that said Presidents Club guests should not harass the hostesses but, with no legal teeth behind that message, the employer has no consequence arising from that possibility and really no incentive to enforce it. It is something that needs to be revisited, and this could be the spur for the government to think about that.” 

According Acas, the 2012 government “explained the repeal” by saying that the provisions had been “little used since their introduction”, citing only one related employment tribunal case. It also “said it was 'unfair' that employers should have to worry about harassment from people 'over whom they have no control', particularly 'when there are already legal remedies that may be available where an employee is in this position'”. 

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