International Equal Pay Day, celebrated on 18 September 2024, represents the longstanding efforts towards the achievement of equal pay for work of equal value between women and men, recognising that the gender pay gap is estimated at 20% globally. It further builds on the United Nations’ commitment to human rights and against all forms of discrimination, including discrimination against women and girls.

In the UK, we’ve had equal pay legislation since 1970 but there remains a gender pay gap of 7.7% for full-time employees across the UK. This does not necessarily mean that employers are not paying men and women equally for doing the same job, although that is one factor. Other factors which contribute to the gender pay gap are the lack of representation of women in the most senior (and therefore highly paid) roles in organisations and the prevalence of gender segregation in certain types of roles and sectors with what is traditionally considered “women’s work” being historically undervalued.

An interesting development in the UK in recent years has been the number of claims being brought by large groups of claimants in the retail sector who work as sales assistants on the shopfloor (mainly women) who have argued that their work is of equal value to warehouse workers (mainly men).

In Thandi & Others v Next Retail Limited, the Employment Tribunal held that it was a breach of equal pay law for Next to pay warehouse staff a higher rate of basic pay than shopfloor staff. The Tribunal had already found at an earlier hearing that the work of both groups was of equal value. The recent hearing addressed Next’s argument that the difference in pay between the two roles was a material factor “other than the difference in sex” – what is known as the “material factor defence.”

The material factors Next had relied upon were market forces and market price, difficulty recruiting and retaining warehouse staff and the viability, resilience and performance of Next and its group of companies. The Tribunal considered whether the material factors Next had relied upon were directly or indirectly discriminatory on the grounds of sex.

It found there was no direct discrimination. Next had not decided to pay men more than women. There were men and women working in the warehouse and they received the same rate of pay regardless of their sex as did the shopfloor staff.

However, the Tribunal did find that there was indirect discrimination. Under equal pay law, if claimants can produce statistics which demonstrate “an appreciable difference in pay between two jobs of equal value, one of which is carried out almost exclusively by women and the other predominantly by men” an employer must then provide an objective justification for the difference. In Next’s case, 77.5% of its sales staff were female whereas warehouse staff were 52.8% male. In addition, Next benchmarked its pay against the market and the higher paid warehouse labour market was predominantly male.

The Tribunal found that the only reason for the difference in pay was cost-cutting. Next could have afforded to pay a higher rate of basic pay to the sales staff but had decided to keep labour costs to a minimum and maximise profitability. Next was therefore unable to justify the difference in pay as a proportionate means of achieving a legitimate aim because cost alone can never be a legitimate aim.

Interestingly, the Tribunal also said that if market forces were allowed to be a “trump card” in cases like this, it would defeat the purpose of the equal pay legislation and allow lower pay for certain types of work due to indirect discrimination to be continued in perpetuity. This case addresses head on the fact that women’s work has historically been undervalued which is the precise issue that the equal value aspect of the equal pay legislation was designed to address.

The implications of the Tribunal’s decision are very significant. The back pay and compensation claimed is said to be more than £30m – divided between 3,540 claimants. Next has said it is appealing the judgment. Tesco and Asda (among other large retailers) who are defending similar claims will be analysing the judgment carefully. All these cases are likely to be hard fought by the employers concerned because of significant compensation sought for backpay and also the cost of equalising pay for their staff going forwards, meaning the issue is unlikely to be settled by the time International Equal Pay Day 2025 comes around.

BDBF is a law firm based at Bank in the City of London specialising in employment law. If you would like to discuss any issues relating to the content of this article, please contact BDBF Partner Claire Dawson (ClaireDawson@bdbf.co.uk) or your usual BDBF contact.

LUNCHTIME WEBINAR – 8 October 2024

From 26 October 2024, all employers must be able to demonstrate compliance with a new legal duty to prevent sexual harassment at work.  Our expert team will unpack this new duty and explain the steps employers should take to be confident about compliance. 

We will consider the following issues:

• What is the scope of the new duty? How does it differ from the existing “reasonable steps defence”?
• Does the duty extend to sexual harassment of staff by third parties such as clients and contractors?
• When will a preventative step be viewed as “reasonable”?
• What types of steps will most employers need to take?
• What are the consequences of breaching the duty?
• How might the duty impact the settlement of sexual harassment claims?

Date: Tuesday, 8 October 2024

Time: 12.00pm-1.00pm

Click here to register

BDBF is delighted to announce the recent appointment of Connie Berry. Connie started her career in employment law with an international law firm in the City and most recently worked as a supervising solicitor for a charity which specialises in advising working parents on their employment rights.

Connie has experience advising both employees and employers in relation to a wide range of matters including unfair dismissal, sex discrimination, equal pay, pregnancy/maternity discrimination, whistleblowing and disability discrimination.

Connie’s appointment brings the firm’s headcount to six partners and 14 associates, in addition to its 7-strong practice team.

The top-ranked Employment Law firm’s ability to attract high calibre talent is testament to the quality of its client base, its stellar track record in litigation, the complex and interesting work the team does, and the collaborative approach it fosters.

BDBF has been top ranked by the leading independent directories for acting for senior executives for the last ten years consecutively. BDBF also has a growing practice acting for employers on their high stakes and high value employment work.

Gareth Brahams, Managing Partner of BDBF said, “We are delighted to welcome Connie to our growing team. I am confident that she will help us continue to deliver the best outcomes for individual clients as well as serving our growing base of employer clients.”

Connie Berry said, “I am delighted to be joining BDBF in a return to private practice. I look forward to getting involved with the firm’s high-quality work and developing my own practice representing individuals at a top ranked firm.”

BDBF is delighted to announce the recent appointment of Abdullah Ahmed, who joins us from Linklaters and has experience across the board in the employment field, but with a special focus in undertaking fact-finding investigations into alleged misconduct in the workplace. Abdullah has a particular interest in the DEI sphere, including DEI policies and positive action.

Abdullah’s appointment brings the firm’s headcount to six partners and 13 associates, in addition to its 7-strong practice team.

The top-ranked Employment Law firm’s ability to attract high calibre talent is testament to the quality of its client base, its stellar track record in litigation, the complex and interesting work the team does, and the collaborative approach it fosters.

BDBF has been top ranked by the leading independent directories for acting for senior executives for the last ten years consecutively. BDBF also has a growing practice acting for employers on their high stakes and high value employment work.

Gareth Brahams, Managing Partner of BDBF said, “We are delighted to bring Abdullah on board. Abdullah is following a well-trodden path for BDBF lawyers out of the magic circle and US firms to our door.”

Abdullah Ahmed said, “I am thrilled to be joining BDBF and continuing my employment law journey with this incredible team. I am looking forward to getting involved with the firm’s market-leading work representing Senior Executives and learning from the very best!”

The High Court has ordered that an employee who was dismissed during his probationary period should be restrained from harassing the Chairman of the company and must return copies of all information that he had taken from the company.

What happened in this case?

The claimant in this case was the Founder and Chairman of an asset management company (the Company).  In 2023, the Company appointed the Defendant to a management position.  However, there were a number of complaints about the Defendant’s conduct, which resulted in him being dismissed during his probationary period.  In response, he brought an unfair dismissal claim in the Employment Tribunal, but the claim was struck out as he did not have the two years’ qualifying service needed.

At some point after his dismissal, the Defendant turned up at the Claimant’s house and blocked his driveway for three hours.  The Claimant invited him into his home and the Defendant pleaded for his job back.  The Claimant said this was a matter for HR and not for him.   On 31 May 2024 the Defendant sent an email to the Claimant in which he set out the names of several individuals and a company and included hyperlinks to various webpages.  The Defendant stated that most, if not all, the names would be familiar to the Claimant and his staff would be interested in hearing about them.  The suggestion was that the named individuals and company were disreputable and were connected to the Claimant and the Company.   The email also alleged that the Claimant and Company were involved in multiple frauds and false accounting.  The Defendant went on to make various threats including that:

• he had the power to “completely destroy” the Company and if the law could not provide him with a remedy that he would “have to fight dirty” until the Company financially compensated him for his losses;
• he would email everyone who worked at the Company, the FCA, HMRC and the Serious Fraud Office, as well as others connected to the Company’s projects;
• he had secretly recorded conversations with the Claimant and taken emails and documents from the Company;
• he could, and would, hound the Company “like a rabid dog” and that he could, and would, “completely destroy”the credibility and “fragile mental health” of five individuals at the Company;
• he had run someone over who had threatened him, stating that “…he didn’t see me coming, there was no witnesses, I’m too smart to leave any evidence behind”;
• he had engaged in extensive reconnaissance and surveillance of the Claimant “both in your manor and online”;
• if he was ignored he would “light so many fires” around the Company that the Defendant would only be able to watch if all “burn to the ground”; and
• if he did not receive a settlement by a certain date the Claimant could watch his staff leave and see things “go up in flames”.

The next day, the Defendant sent a truncated version of the email to the Claimant three times via WhatsApp.  A few days later, the Defendant sent an email to individuals at the Company who were closely connected to the Claimant.  The email was substantially the same as the email of 31 May 2024, save that it told the recipients that they too would be damaged by the publicity that he planned to generate.  He addressed to them the same demand for money that had been made to the Claimant. 

On 6 June 2024, the Claimant made a “without notice” application under the Protection from Harassment Act 1997 for an injunction to restrain the Defendant from approaching him, communicating with him and/or from carrying out his threat to publish material to third parties.  The injunction was granted on an interim basis.  The Defendant was also ordered to serve on the Claimant’s solicitor (a) copies of all communications already made to any third party about the Claimant, his family, the Company or its staff; and (b) copies of all information obtained by the Defendant from the Company which was in his possession or the possession of a third party. 

On 28 June 2024, the Defendant stated that he had nothing to disclose as he had not made any communications to any third party.  However, he refused to hand over copies of the information he had taken from the Company on the basis that he needed to keep it to act as a whistleblower and to bring a counterclaim.

On 12 July 2024, a “return date” hearing was held to consider whether the injunction should be discharged or continue, pending the full trial.  The Defendant did not attend the hearing.

What was decided?

The High Court ordered that the injunction should continue until the full trial of the claim.

The Court held that it was likely that the statements made in the email would be found to be “…deliberate, unacceptable, oppressive, highly objectionable and of a gravity to sustain criminal liability under the Protection from Harassment Act 1997”.   Their tone was intimidating, and they threatened to ruin the Company and damage the Claimant’s reputation.  There was also a threat of physical violence and the “unsettling” claim that the Defendant had been carrying out surveillance on the Claimant.

The messages were targeted at the Claimant and aimed at extracting money from him.  The Defendant was persistent – he had promised to hound the Company like a “rabid dog” and appeared to be carrying out the threat.  He had since taken to leaving intimidating voice messages with the Claimant’s solicitors and had submitted two job applications to the Company for roles he did not appear to be qualified for.

The threats were also likely to amount to blackmail, given that they constituted demands with menaces and there was no lawful basis for them.  This meant that the Defendant’s right to freedom of expression did not have much weight and would not stand in the way of a final injunction.  

At the hearing the Claimant gave evidence that the Defendant had mischievously, or wrongly, linked him and the Company to parties and online material that had nothing to do with them in order to suggest wrongdoing.  The Claimant also denied all the allegations of fraud.  If established at trial, this would add to the oppressive nature of the conduct (although, even if the allegations were true, they could be found to have been advanced for an improper purpose, meaning they would still be oppressive and unacceptable).

There was also a strong case to say the Defendant knew (or ought to have known) that his conduct amounted to harassment – any reasonable person in his position would have recognised this.  The Claimant had given evidence that he was genuinely frightened of the actions that the Defendant could take to harm him and the Company.

Turning to the Defendant’s failure to comply with the order to hand over the documents he had taken from the Company, the Court said that the reasons offered by the Defendant were not good reasons in law.  The Court referred to the recent decision of the High Court in Payone GmbH v Logo [2024] EWHC 981 (KB) where it was said that “It is well-established that the Courts will not sanction employees helping themselves to, or retaining, their employers documents for the purposes of future litigation, or anticipated regulatory issues or protected disclosures, or even taking legal advice”.  Accordingly, the Defendant was ordered to comply with the order, or put forward a valid legal reason for not doing so.

What does this mean for employers?

Although situations like this are thankfully rare, this case reminds us that if a disgruntled former employee wages a campaign of harassment against employees of the company, there is a route available to restrain them.   Harassment in this context covers more than just threats of physical violence but includes any action which could cause alarm or distress.  For example, things like watching or following someone or threatening to publish or publishing humiliating, offensive or upsetting content about them.  Where there have been at least two instances of such harassment, this will count as a course of conduct which could give rise to a claim under the Protection from Harassment Act 1997.

Employers should also be mindful that they can be vicariously liable for the harassment of their employees in the course of their employment under the Protection from Harassment Act 1997.  Unlike harassment under the Equality Act 2010, there is no “reasonable steps” defence available to an employer in this situation.  Therefore, if an employee has suffered harassment at work on one occasion, employers should take swift action to protect the employee at work to avoid a second incident which could give rise to a claim.

RBT v YLA

BDBF is a law firm based at Bank in the City of London specialising in employment law.  If you would like to discuss any issues relating to the content of this article, please contact Principal Knowledge Lawyer Amanda Steadman (amandasteadman@bdbf.co.uk) or your usual BDBF contact.

In its General Election Manifesto, the Labour Party promised to upgrade the National Minimum Wage to reflect the cost of living and ensure that all adults received the same rate.  Less than a month after being elected, the Labour Government has set the wheels in motion for these changes to take effect in April 2025.

What was promised in the Manifesto?

In its General Election Manifesto, the new Labour Government promised that it would “make sure the minimum wage is a genuine living wage”.  It planned to do this by changing the remit of the Low Pay Commission (the LPC), the independent body that advises Government about the minimum wage.  The expanded remit would mean that the minimum wage rates should account for the cost of living.  Currently, the 21 year+ national minimum wage rate sits at £11.44 per hour (also known as the “National Living Wage” rate).  If adjusted for the cost of living, it would be brought closer to the pay rates championed by the charity, the Living Wage Foundation.  The Living Wage Foundation recommends that employers pay, on a voluntary basis, a “real living wage” of £12.00 per hour outside London and £13.15 per hour within London.  

Labour also promised to remove the “discriminatory” minimum wage rate age bands, so that all adults would be entitled to the same rate.  Effectively, this would mean doing away with the 18 to 20 year old rate (currently, £8.60 per hour).  However, there were no plans to remove the 16 to 18 year old rate or the Apprentice rate (currently, £6.40 per hour in both cases).

What steps have been taken since the election?

The Government has already taken steps to fulfil these Manifesto promises.  On 30 July 2024, the Government wrote to the Chair of the LPC to confirm the update to its remit.   The LPC has been asked to recommend a National Living Wage rate to apply from April 2025 which should take into account the cost of living, including the expected annual trends in inflation between now and March 2026.  In addition to the cost of living, the remit of the LPC will continue to consider the impact on business, competitiveness, the labour market and the wider economy, as well as ensuring that the rate does not drop below two-thirds of UK median earnings for workers aged 21 and over.

As far as regional differences in pay rates are concerned, the Government has asked the LPC to continue to gather evidence on the differing impact across the United Kingdom of increases to the minimum wage rates, to inform how the minimum wage helps to deliver greater living standards for working people in all areas of the UK.

On top of this, the LPC has also been asked to recommend a new national minimum wage rate for 18 to 20-year-olds to apply from April 2025.  The aim is to narrow the gap with the National Living Wage rate as a first step towards achieving the promise of a single adult rate.  The Government says that steps will need to be taken year by year to achieve this, taking into account the effects on employment of younger workers, incentives for them to remain in education or training, and the wider economy.

As far as under-18s and Apprentices are concerned, the Government has asked that these rates should be set “as high as possible” without damaging the employment prospects of each group.

Next steps?

The LPC has been asked to provide its recommendations to the Government by the end of October 2024.  In due course, the Government will confirm the new rates, which will come into force in April 2025.  Employers who have workers paid at a rate on or around the national minimum wage will need to take care to ensure that the new rates are applied on time.  Care must also be taken not to inadvertently fail to pay in line with the new rates, since this can lead to action by HMRC who can demand underpayments going back six years, issue fines and publicly “name and shame” the employer.  For example, many employers operate salary sacrifice arrangements as a way of providing benefits, such as pensions, to staff in a tax efficient way.  However, it is the post salary sacrifice pay that counts for national minimum wage purposes.  

National Minimum Wage and National Living Wage: Low Pay Commission remit – July 2024

BDBF is a law firm based at Bank in the City of London specialising in employment law.  If you would like to discuss any issues relating to the content of this article, please contact Principal Knowledge Lawyer Amanda Steadman (amandasteadman@bdbf.co.uk) or your usual BDBF contact.

The Government has introduced regulations which will bring the Employment (Allocation of Tips) Act 2023 into force on 1 October 2024, applying to tips paid on or after that date.  The Act will require employers to ensure that workers receive tips in full, and that they are allocated in a fair and transparent way.  Our briefing note provides a quick reminder of what the new law is all about.  

What will the new Act do?

Under the new Act, employers will be required to ensure that all qualifying tips, gratuities and service charges over which an employer exercises control or significant influence are allocated fairly to workers (including eligible agency workers).  This means tips, gratuities and service charges received directly by the employer (e.g. those paid to an employer by a customer using a credit or debit card) and those received by the worker where the employer directs what happens to them.  However, the Act does not apply to cash tips paid directly to workers and which are kept by them or shared out between the workers on their own terms.

Tips must be paid to workers in full by no later than the end of the month following the month in which the customer paid the tip.  If this is not done, the worker will have the right to bring a claim for unlawful deductions from wages.  An employer may arrange for all or part of the qualifying tips, gratuities and service charges to be allocated between workers by an independent tronc operator. 

Employers may not require workers to agree to give up their rights under the Act, nor can they get around the new rules by reducing wages by an amount equivalent to the tips (or otherwise asking the worker to reimburse them for the amount of the tips). Workers will also have the right to complain to an employment tribunal where an employer fails to allocate fairly and/or pay tips in line with the new rules.  An employer can be ordered to revise its allocation of tips and/or make a payment to the worker (and other workers).  It may also be ordered to pay compensation of up to £5,000.

In addition, those employers that pay tips, gratuities and service charges on more than an occasional and exceptional basis will be required to have a written tips policy which is given to all workers. Further, such employers must keep records of tip allocation for three years and make those records available to workers on request. Workers will have the right to complain to an employment tribunal about a failure to comply with rules on policies or keeping records.

Statutory Code of Practice

Accompanying the new Act will be a statutory Code of Practice on the Fair and Transparent Distribution of Tips (the Code).   The Code has five sections covering: 

• qualifying tips and qualifying workers;
• the factors and methods relevant to fairness; 
• transparency;
• addressing problems; and 
• a glossary of terms. 

Non-compliance with the provisions of the Code does not give rise to a legal claim in itself. However, as a statutory code, it will be admissible in evidence in employment tribunal proceedings and will be taken into account where relevant. 

Next steps?

Employers operating in sectors where staff receive tips will need to familiarise themselves with the new rules and Code, devise a fair system for distributing tips, prepare a written policy and ensure it maintains appropriate records.  Although the new rules apply to employers in all sectors, in practice, it is most likely to affect employers operating in the following areas:

• the hospitality sector, in relation to bar and restaurant staff;
• the beauty sector, in relation to hairdressers and beauticians;
• the hotel sector, in relation to valets, doorman, porters and maids; and
• the transport and delivery sector, in relation to taxi drivers and take-away delivery drivers.

Employment (Allocation of Tips) Act 2023

Statutory Code of Practice on fair and transparent distribution of tips

BDBF is a law firm based at Bank in the City of London specialising in employment law.  If you would like to discuss any issues relating to the content of this article, please contact Principal Knowledge Lawyer Amanda Steadman (amandasteadman@bdbf.co.uk) or your usual BDBF contact.

The King’s Speech was delivered in Parliament on 17 July 2024, setting out the Labour Government’s legislative agenda.  The speech promised that two new pieces of employment legislation will be introduced: an Employment Rights Bill and an Equality (Race and Disability) Bill.  

Although the draft Bills have not yet been published, the background briefing notes to the King’s Speech suggest that they will take forward many of the Labour Government’s Manifesto promises on workplace law reform.

The Employment Rights Bill

This Bill will deliver the following manifesto promises:

• Banning exploitative zero-hour contracts and ensuring that workers have a right to a contract that reflects the number of hours they regularly work and that all workers get reasonable notice of any changes in shifts with proportionate compensation for any late cancellations or changes. 
• Ending ‘Fire and Rehire’ by reforming the law to provide effective remedies and replacing the previous Government’s statutory Code of Practice on Dismissal and Re-engagement (which came into force on 18 July 2024).
• Making parental leave, sick pay and protection from unfair dismissal available from day 1 on the job, but with employers permitted to operate probationary periods to assess new hires.  We discussed the impact of making unfair dismissal a Day 1 right in our briefing here.
• Strengthening Statutory Sick Pay by removing the lower earnings limit to make it available to all workers and removing the waiting period. 
• Making flexible working the default from day 1 on the job, with employers required to accommodate this as far as is reasonable. 
• Strengthening protections for new mothers by making it unlawful to dismiss a woman who has had a baby for six months after her return to work, except in specific circumstances. 
• Establishing a new Single Enforcement Body, also known as a “Fair Work Agency”, to strengthen enforcement of workplace rights. 
• Establishing a Fair Pay Agreement in the adult social care sector and, following review, assess how, and to what extent, such agreements could benefit other sectors. 
• Reinstating the School Support Staff Negotiating Body, to establish national terms and conditions, career progression routes, and fair pay rates. 
• Updating trade union legislation by removing restrictions on trade union activity – including the previous Government’s approach to minimum service levels – and ensuring industrial relations are based around good faith negotiation and bargaining. 
• Simplifying the process of statutory recognition and introducing a regulated route to ensure workers and union members have a reasonable right to access a union within workplaces.

The Equality (Race and Disability) Bill

This Bill will deliver the following manifesto promises:

• Enshrining in law the full right to equal pay for ethnic minorities and disabled people, making it easier for them to bring unequal pay claims.  We discussed the potential impact of these new equal pay rights in our briefing here.
• Introducing mandatory ethnicity and disability pay reporting for larger employers (i.e. those with 250+ employees).

What’s missing?

Although ambitious in scope, many of Labour’s promises for workplace law reform are missing from these two Bills. In some cases, this is because the nature and impact of the proposals needs to be explored in greater depth (e.g. by way of a “call for evidence” and public consultation) before setting them out in legislation.  For example, the proposals to introduce a single worker status and a right for workers to disconnect outside their normal working hours. 

In contrast, other proposals may be taken forward by way of secondary legislation (i.e. a statutory instrument) and do not need to be included in a new Act of Parliament.  For example, the dual discrimination provisions and public sector socio-economic duty provisions are already contained in the Equality Act 2010 and just need to be enacted.  It is possible that other proposals which require relatively minor drafting changes to existing legislation could also be taken forward by way of secondary legislation.  For example, the proposals to require employers to publish gender pay gap action plans and to increase the time limits in statutory employment claims from three to six months.  

It remains to be seen how, and when, other proposals will be taken forward, including plans to:

• strengthen the new duty to prevent sexual harassment and introduce protection from third party harassment;
• change equal pay law to permit comparisons with outsourced workers and introduce a new enforcement unit;
• regulate the surveillance of employees;
• introduce a right to bereavement leave;
• strengthen the law on whistleblowing and TUPE;  
• require employers to publish “menopause action plans”; and
• change the trigger for collective redundancy consultation. 

Next steps?

Labour promised to introduce legislation on workplace law reform within 100 days of coming into power, meaning drafts of the two Bills should be published on or before 12 October 2024.  We will produce a further update once the draft Bills are available.

In the meantime, if you would like a refresher on Labour’s plans for employment law, you can revisit our webinar from last month here.

The King’s Speech 2024

The King’s Speech 2024 – Background Briefing Notes

BDBF is a law firm based at Bank in the City of London specialising in employment law.  If you would like to discuss any issues relating to the content of this article, please contact Principal Knowledge Lawyer Amanda Steadman (amandasteadman@bdbf.co.uk) or your usual BDBF contact.

In Weir v Citigroup Global Markets Ltd, an Employment Tribunal has held that the dismissal of a City trader for misleading the financial markets was unfair because he had been operating in line with industry guidance and his managers knew of his approach.  Further, the employer’s lengthy disciplinary process was unacceptable, unreasonable and caused significant stress and worry to the employee.

What happened in this case?

Mr Weir worked for Citigroup as a Sales Trader on its Asia-Pacific High Touch trading desk (the APAC desk) in London.  His role involved providing professional and large-scale investors with market updates, trade ideas and sourcing buy and sell trade ideas in relevant stock.  Part of his role involved the identification and publication of “indications of interest” (IOIs).  IOIs are indications that a client has an interest in buying or selling particular stock in a particular quantity.  The IOIs are published on Bloomberg’s financial trading platform with the aim of attracting a counterparty.  

Following a regulatory investigation into the activities of the Hong Kong office, Citigroup reviewed the practices of the APAC desk in London.  As a result, disciplinary allegations were raised against Mr Weir, chiefly, that he had misled the financial market by publishing certain IOIs without a genuine client interest and that he had failed to tell his line manager that he knew or suspected that misleading IOIs were being published.  

Mr Weir maintained that the methodology he used meant that the IOIs he published were supported by a “reasonable expectation of interest” from specific clients, drawn from his own knowledge and experience of those clients and orders already in progress.  Mr Weir argued that his approach was in line with industry-wide guidance in place at the time and Citigroup had not provided any training on IOIs, nor issued any internal policy or guidance to the contrary.

After an extremely lengthy investigation and disciplinary process spanning more than two years, Mr Weir was summarily dismissed for gross misconduct.  His appeal against his dismissal was rejected.  Mr Weir claimed he had been unfairly dismissed.

What was decided?

The Employment Tribunal upheld Mr Weir’s unfair dismissal claim.  Although Citigroup genuinely believed that Mr Weir had committed acts of misconduct, the Tribunal found that it did not have reasonable grounds for this belief.

As to the allegation that he had published IOIs without a genuine client interest, the Tribunal held that Mr Weir had acted properly in following industry guidance on IOIs at the time, which required the existence of a reasonable expectation of client interest.  Further, the methodology Mr Weir had used was legitimate and ensured that there was a reasonable expectation of client interest.  The Disciplinary Committee had failed to grapple with the methodology he had used in full.  Further, they had misunderstood the industry guidance or, alternatively, had “unreasonably and unwarrantedly” sought to apply a higher standard of genuine client interest, something which had never been communicated to Mr Weir.

As to the allegation that he had failed to tell his line manager what was happening, the Tribunal held that it was unreasonable to find that this amounted to misconduct given that Mr Weir had believed he was behaving appropriately and in line with industry guidance.  Further, it was unreasonable in light of the fact that Mr Weir’s “matrix” managers based in Hong Kong had been aware of the methodology being used by the APAC desk.  Mr Weir’s direct line manager in London conceded that she did not know which matters needed to be reported to matrix managers and which to line managers, since no formal policy or guidance on this matter had ever been issued by Citigroup.

The Tribunal also held that Citigroup had failed to carry out a reasonable investigation. The process started in September 2019, when Mr Weir was given just two minutes’ notice of an initial “fact-finding” meeting.  There was a hiatus until March 2020, when Mr Weir was invited to a same-day investigation meeting.  Seven people attended the meeting on behalf of Citigroup, which  spanned two days.  Mr Weir was questioned for over 10 hours, on top of his usual workload.  The Tribunal was critical about this stage of the process, noting that it was an “…unreasonable way of conducting an investigation and (Citigroup) demonstrated inadequate regard for the likely impact upon (Mr Weir)”.  The Tribunal said that it was inevitable that a panel interview carried out in such an intensive manner and over a consecutive two-day period would feel hostile and make it more difficult for Mr Weir to explain his actions.  

At end of investigation meeting, Mr Weir was told that the investigation process would be completed by the end of March 2020, however, this was not the case.  Again, there was a hiatus.  Between March and November 2020, Mr Weir asked for updates about the process and was repeatedly told that a resolution was “coming soon”.  The Tribunal found that the investigation process and lack of information had caused Mr Weir’s mental health to deteriorate, leading him to go off sick with work-related stress.  By February 2021, Mr Weir felt better and asked to return to work on a phased basis.  Citigroup responded the next day by suspending him and notifying him that a decision had been taken to pursue disciplinary proceedings against him.  

The Tribunal had this to say about the investigation process: “The length of time taken to complete the investigation was unacceptable and unreasonable, causing significant stress and worry for (Mr Weir)”.  They also firmly rejected Citigroup’s explanation that Covid had contributed to the delays noting that: “We do not find it credible that a global organisation such as (Citigroup) with all its human and technical resources, was unable to progress the…situation in a timely manner or respond to…requests for updates in an accurate or timely manner”.

The disciplinary process eventually began in April 2021.  Before the disciplinary hearing took place, the in-house lawyer who had led the investigation met with the Disciplinary Committee and inaccurately represented Mr Weir’s position on the disciplinary allegations.  The disciplinary hearing took place on 7 April 2021.  The Disciplinary Committee was made up of a four-person panel, contrary to the terms of the Disciplinary Policy that had been given to Mr Weir (which said that two people would attend from Citigroup).  The hearing lasted for 90 minutes and focussed on one allegation, which was ultimately not upheld.  The hearing was adjourned and reconvened a few days later.  It was at this second hearing that the two allegations which went on to be upheld were discussed.  That hearing lasted for just 30 minutes. 

After the hearing, one of Citigroup’s Employee Relations specialists was tasked with undertaking further investigations on a particular issue.  She met with Mr Weir on 21 April 2021, but used the incorrect “script template”, with the result that she told him the meeting was a further disciplinary hearing, rather than an investigatory meeting.  At the meeting, she failed to probe the particular issue in any detail and later misrepresented Mr Weir’s position to the Disciplinary Committee (suggesting he had been definitive when, in fact, he had been equivocal).  Mr Weir was dismissed for gross misconduct on 10 June 2021. 

An appeal hearing took place on 2 September 2021 but was adjourned for over four months before reconvening on 22 January 2022.  On 16 February 2022, the appeal officer upheld the Disciplinary Committee’s decision to dismiss.  Yet the Tribunal held that the appeal conclusion was at odds with what had been said in the dismissal letter, reached conclusions that were unsupported by evidence and demonstrated an acceptance of the in-house lawyer’s inaccurate representations of Mr Weir’s position (despite the fact that minutes of meetings which had been available to the appeal officer showed Mr Weir’s true and consistent position).  

The compensation to be awarded to Mr Weir is yet to be decided.  However, the Tribunal held that Mr Weir had complied with industry guidance and had been co-operative throughout the investigation and disciplinary process.  Therefore, it could not be said that his conduct had contributed his dismissal, meaning there will be no reduction in his compensation.  Nor was there any prospect that Mr Weir would have been dismissed fairly had Citigroup conducted the process in a reasonable manner, again, meaning there will be no reduction to his compensation.  

What are the learning points for employers?

This decision underlines the importance of employers not allowing disciplinary decisions to be clouded by wider external events, such as regulatory censure.  The evidence must be assessed objectively, and employers should look for and consider evidence which supports the employee’s position, and not focus only on evidence which would support the issuing of a disciplinary sanction.  This is all the more important where the employee stands to lose their job (and, in regulated professions, potentially their career). 

It also illustrates the importance of keeping internal policies and practices under review to ensure that they comply with the law and any regulatory rules and expectations.  Such policies and practices should be set down in writing, communicated to staff and training offered as appropriate.  Failing to stay on top of this and simply hoping for the best may mean your hands are tied when it comes to disciplinary action later down the line.  As seen in this case, trying to change the rules after the event will not justify a disciplinary sanction.

Crucially, this decision reminds employers of the importance of getting the investigation and disciplinary process right.  As seen here, Tribunals will have little patience for employers who have plenty of expertise and resources at their disposal but get things wrong.  The key takeaways from this case are:

• Deal with the issues promptly and without unreasonable delay.  This is a core principle set down in the statutory Acas Code of Practice.  To the extent that there is a legitimate delay, tell the employee the reason for it and be clear about when the process will resume. And be prepared to “think outside the box” – could the process be accelerated in a different way? For example, by way of a virtual meeting, conference call, or by allowing the employee to make written representations.

• Know your own policies and procedures and apply them correctly.  This may seem like an obvious point, but this case demonstrates how even an extremely well-resourced employer can get it wrong.  Make sure meetings are labelled accurately and are convened in the right way.  Be mindful just how stressful the situation is for the employee.  Where appropriate, be flexible about the process, for example, allow the employee to be accompanied by a friend or family member.

• Conduct the meetings in a reasonable manner.  Give reasonable notice of meetings and keep them to a sensible length.  Equally, don’t rush through important meetings.  The best approach is to try to agree the length of the meeting with employee in advance but, again, stay flexible.  If the employee is upset, offer to take a break or adjourn to another day.   Do not turn up to meetings “mob-handed” since this is quite likely to intimidate the employee and have a negative impact on their evidence.  

• Make sure all parties involved in the process understand the scope of their role.  Investigators are there to gather evidence in an even-handed way and report it neutrally to the disciplinary panel.  It is not their role to construe the information in a certain way or lobby for a particular disciplinary outcome.  The decision on outcome is for the disciplinary and appeal panels.  Those decision-makers should weigh up the evidence carefully and take care not to adopt a broad-brush approach in order to get to a desired outcome. 

BDBF is a law firm based at Bank in the City of London specialising in employment law.  If you would like to discuss any issues relating to the content of this article, please contact Principal Knowledge Lawyer Amanda Steadman (amandasteadman@bdbf.co.uk) or your usual BDBF contact.

An internal reorganisation which led to an employee’s part-time role being subsumed within a broader full-time role did not necessarily mean the role was redundant.  Given that the employee was on maternity leave, if the role was not redundant, it raised the prospect that the process was a sham motivated by the maternity leave.   

What happened in this case?

Ms Ballerino began working for The Racecourse Association as a part-time Financial Accountant in August 2018.  She was engaged to work from home for 40 days per year, although she felt that the role really needed her to work more than double that amount.  The employer agreed to review the role when a new Chief Executive was in post the following year.  As Ms Ballerino was pregnant when she started employment, she began a period of maternity leave in December 2018.  

In February 2019, the new Chief Executive, Mr Armstrong, came on board.  He undertook a review of the business and decided that a new full-time, office-based role of “Finance Manager and Business Analyst” should be created.  The new role would subsume Ms Ballerino’s duties.  In late June 2019, two candidates attended second-round interviews for the new role.

Around the same time, the employer contacted Ms Ballerino (who was on maternity leave) to inform her that she was at risk of redundancy because of the decision to amalgamate her duties within the Finance Manager and Business Analyst role.  She was provided with a job description for the new role and invited to apply for it, but, at the same time, was given a draft settlement agreement governing the terms of her exit from the business.  Ms Ballerino did not apply for the new role and, after settlement negotiations had broken down, she was dismissed. 

Ms Ballerino claimed that the redundancy process was a sham designed to exit her from the business because of her maternity leave or sex.  In the alternative, she argued that if there had been a genuine redundancy situation, the dismissal was automatically unfair because the employer had failed to allocate the new role to her, which it should have done given that it was (she said) a suitable alternative vacancy and she had been on maternity leave at the time.

The Employment Tribunal rejected the discrimination claims, finding that there was an acceptable business reason for the reorganisation and the redundancy was not a sham.  It also rejected the automatic unfair dismissal claim, finding that the new role was not a suitable alternative vacancy because its main focus was on business analysis rather than financial accounting.  Further, it was a full-time, office-based role rather than a part-time, home-based role.  As such, the employer had not been obliged to offer it to her ahead of other potential candidates. 

Ms Ballerino appealed to the Employment Appeal Tribunal.

What was decided?

The EAT upheld the appeal.

On the automatic unfair dismissal claim, the Employment Tribunal had formed the impression that there was a genuine redundancy situation and had then jumped straight to the question of whether the new role was a suitable alternative vacancy.  Yet, the Tribunal had failed to interrogate the legal question of whether the employer’s need for employees to carry out financial accounting work had, in fact, ceased or diminished or was expected to do so.  Although that short-cut may be permissible in some situations, that was not the case here.  Ms Ballerino’s role was still relatively new and there had been a debate about how many working hours the role really required.  In these circumstances, the fact there was some internal reorganisation and a need for additional tasks to be performed, did not necessarily mean that her role was no longer required.  

On the discrimination claims, the Employment Tribunal had accepted the employer’s explanation for the dismissal at face value i.e. that she was redundant.  However, this decision was problematic because the Tribunal had not properly scrutinised the question of whether her role was, in fact, redundant.  That question needed to be answered – because if her role was not redundant then this would bolster her argument that the dismissal was a sham.

The case has been remitted to the Employment Tribunal to examine the question of whether the role was genuinely redundant.

What are the learning points for employers?

This decision reminds employers (and Employment Tribunals) of the need not to make assumptions in business reorganisations.  Expanding a role in terms of hours and/or duties does not necessarily mean that the requirement for the original duties has ceased or diminished.  This is particularly so where the original role is relatively new, fluid and subject to review, as was the case here.   

In internal reorganisation situations, the best advice for employers is to take care to undertake the necessary groundwork.  Create a job specification for the new role setting out its scope and duties in full.  This is especially important where duties are to be reallocated from existing roles to a new role.  Having proper documentation in place helps to overcome suggestions that the whole exercise is a sham designed to exit specific employees.   Ensure that appropriate redundancy consultation is undertaken, and that careful consideration is given to whether any new role amounts to a suitable alternative vacancy for a woman on maternity leave, who will have priority for such vacancies (as do certain other employees).  If an employee who has priority is denied such a role, they may be able to claim that they have been automatically unfairly dismissed and/or they have suffered pregnancy and maternity or sex discrimination.

Ballerino v The Racecourse Association Ltd

BDBF is a law firm based at Bank in the City of London specialising in employment law.  If you would like to discuss any issues relating to the content of this article, please contact Principal Knowledge Lawyer Amanda Steadman (amandasteadman@bdbf.co.uk) or your usual BDBF contact.

A Tribunal has ruled that a trainee solicitor left unsupervised in a chaotic working environment was unfairly dismissed for blowing the whistle on the way the firm was run.  Although she only had ten months’ service, she was able to claim automatic unfair dismissal and was awarded over £36,000 compensation.

What happened in this case?

Ms Kaur was employed as a trainee solicitor by Gillen De Alwis Solicitors (the firm).  Before she even started work, the firm began to hand case files over to her to work on.  Upon starting employment, she received no meaningful induction. The day after she started, Ms De Alwis, one of the founding partners of the firm, handed over to her the caseload of two qualified lawyers. During her first few weeks of employment, Ms De Alwis put pressure on Ms Kaur to complete tasks, despite the fact that she had sustained a back injury and was in pain.  Ms Kaur was told that her training contract would be in jeopardy if she did not get things done.  

Ms Kaur’s back injury caused her to take sick leave between 19 July and 24 September 2021.  During her sickness absence the firm required her to carry out work in order to be paid Statutory Sick Pay.  She was not paid her normal salary for the time that she worked.  When she returned to work, the department was still operating in a chaotic manner.  There was no appropriate management or supervision and Ms Kaur and an intern were frequently left unsupervised to deal with matters and approve contracts without them being checked by a qualified lawyer.

After her return to work, Ms Kaur was also subjected to bullying and harassing treatment.  She was criticised for not completing work which she had, in fact, completed.  She was unreasonably blamed for delays on client matters.  She was screamed at on the telephone and spoken to in a belittling, rude and insulting way.  She was also moved between departments with no notice.

Ms Kaur raised her concerns about the way the practice was being run to senior colleagues and partners within the firm on numerous occasions between October 2021 and February 2022.  She also contacted the Solicitor’s Regulatory Authority (SRA) by telephone on three occasions and eventually made a written report to them.  In early March, Ms Kaur told the firm’s newly appointed HR manager that she wished to raise a formal grievance and that she was considering raising the matter with the SRA (when, in fact, she already had).  Around the same time, Ms Kaur saw a doctor in relation to work-related stress and anxiety and went on to take two weeks’ sick leave.  

She submitted a grievance on 11 March 2022 but received no response.  She submitted a data subject access request on 5 April 2022.  Three days later, she was summarily dismissed without any investigation or disciplinary procedure having been followed.  Various reasons were given including that she had failed to follow reasonable instructions and was incapable of being trained or meeting the practice skill standards.  Ms Kaur claimed that she had been automatically unfairly dismissed for blowing the whistle. The firm went into voluntary liquidation at the end of 2023.

What was decided?

The Employment Tribunal found Ms Kaur to be committed to her profession and an intelligent and diligent person.  She had not been given proper training or supervision and had been held to an unreasonably high standard.  It found that any failures in the service provided to clients were primarily down to the firm’s failure to manage its practice appropriately or to train and supervise its staff.   The Tribunal concluded that Ms Kaur had not been guilty of gross misconduct entitling the firm to summarily dismiss her.

The Tribunal went on to find that the disclosures that Ms Kaur had made amounted to protected disclosures.  They contained information and Ms Kaur reasonably believed that they tended to show that the firm was in breach of its duties (in particular, certain sections of the SRA’s Code of Conduct for Solicitors).  She also reasonably believed that it was in the public interest to raise these matters.  In particular, she was concerned about the negative impact on clients of the firm who were receiving a poor service.

Having found that she had made protected disclosures, the question was whether they were the principal reason for her dismissal.  In light of the fact that the firm did not carry out an investigation or disciplinary process, and the finding that Ms Kaur was not guilty of misconduct, the Tribunal drew an inference that the firm did not genuinely consider this to be a misconduct case.   Coupled with the timing of the dismissal, the Tribunal was satisfied that it was more likely than not that the real reason for the dismissal was the protected disclosures.

The Tribunal awarded compensation of £36,062, which included an uplift to compensation of 25% to reflect the firm’s “complete failure” to comply with the Acas Code of Practice on disciplinary and grievance procedures.  The compensation award was relatively low as a result of the fact that the firm went into voluntary liquidation, meaning Ms Kaur’s employment would have come to an end around that time in any event.  

What are the learning points?

Whilst the facts of this case are at the more extreme end of the scale, it does demonstrate the need for employers to have effective practices for managing and supervising junior staff in place, including inductions, workload management and day to day supervision.  A failure to do is likely to generate a stressful working environment, leading to disengagement, sickness absence and employment claims.  Here, the claimant was able to rely on breaches of a regulatory code in order to qualify as a whistleblower.  However, non-regulated employees could argue that an unmanageable and chaotic working environment and/or bullying endangers the health and safety of staff, and this may well be enough to get them over the hurdle of qualifying as whistleblower.  

The decision also underlines the need for employers to follow proper dismissal procedures for new staff in appropriate cases.  Here, the claimant had under two years’ service and so could not bring an ordinary unfair dismissal claim.  As a result, it appears that the firm dispensed with any form of investigation or disciplinary procedure prior to dismissal and ignored the minimum requirements in the Acas Code.  However, the firm failed to spot that the claimant had unlocked the door to bring an “automatic” unfair dismissal claim as a whistleblower – a claim which may be brought from Day 1 of employment.  Employers wishing to dismiss employees with under two years’ service should always check that there are no aggravating factors present which may mean the employee could still bring claims about the dismissal.  It should also be remembered that the new Labour Government has indicated that it plans to remove the two-year service requirement for unfair dismissal claims.  If this happens, proper dismissal procedures will need to be followed in every case.

Although it is unlikely that the claimant will ever recover her compensation, the outcome of this case is still extremely valuable to her.   She gave evidence to the Tribunal that the stigma of having been dismissed directly contributed to her being turned down for employment.  This decision means she may now say that she was unfairly dismissed, and, indeed, that she was commended by the Tribunal for her professionalism and ability.  

Kaur v Gillen De Alwis Solicitors Ltd (in Creditor’s Voluntary Liquidation)

BDBF is a law firm based at Bank in the City of London specialising in employment law.  If you would like to discuss any issues relating to the content of this article, please contact Principal Knowledge Lawyer Amanda Steadman (amandasteadman@bdbf.co.uk) or your usual BDBF contact.

The Equality and Human Rights Commission (EHRC) has confirmed that the new duty for employers to take reasonable steps to prevent sexual harassment at work will come into force on 26 October 2024.  The EHRC has opened a consultation on new guidance which will govern how the duty will operate in practice.  In this briefing, we explain the duty in full and consider the recommendations set out in the guidance. 

Do employers currently have to take steps to prevent sexual harassment?

The current position is that sexual harassment in the workplace is unlawful, and employers and individual perpetrators may be found liable in claims brought in the Employment Tribunal.  However, employers can avoid being found vicariously liable for harassment committed by their workers if they can show that they took all reasonable steps to prevent such harassment from occurring – this is known as the “reasonable steps defence”.  In this context, reasonable steps include things like implementing an anti-harassment policy; providing good quality and regular training to staff; and dealing with complaints effectively.  

In practice, most employers elect to take such steps, but there is no legal obligation to do so.  However, from 26 October 2024, the Worker Protection (Amendment of Equality Act 2010) Act 2023 (the Act) will introduce a mandatory duty on all employers to prevent sexual harassment, regardless of whether they wish to be able to rely on the reasonable steps defence.  

What is the new duty to prevent sexual harassment?

The new duty to prevent will require all employers to take reasonable steps to prevent sexual harassment of workers in the course of their employment.  In this context, “sexual harassment” means unwanted conduct of a sexual nature which has the purpose or effect of violating a person’s dignity or creating an intimidating, hostile, degrading, humiliating or offensive environment for them.  Importantly, the duty does not extend to either:

• less favourable treatment of an individual because they had either rejected or submitted to sexual harassment; or

• harassment related to any protected characteristic, including sex-based harassment (i.e. where an individual suffers harassment related to the fact that they are a man or women, but the unwanted conduct in question is not of a sexual nature).

The new duty extends to sexual harassment occurring “in the course of employment”.  Naturally, this covers sexual harassment occurring within the workplace, but it also covers harassment occurring at work-related events such as conferences, off-sites, parties or leaving drinks.   Importantly, the duty requires employers to anticipate the situations when workers might be exposed to sexual harassment and take action in advance to prevent it from happening.  Employers must not wait until an incident has occurred before taking action.

In one respect, the new duty is less stringent than the reasonable steps defence, in that it only requires employers to “take reasonable steps” rather than to “take all reasonable steps”.  When the Act was on its passage through Parliament, it was envisaged that it would require employers to take all reasonable steps.  However, this was watered down due to fears that it would be too onerous for employers.  Yet the new Labour Government has promised to strengthen the duty by reinstating the requirement for all reasonable steps to be taken.  However, this would need an amendment to the Act, and it is not yet known when this change will be made (but it seems unlikely that it will be made before the duty comes into force).  

Will the new duty cover sexual harassment committed by third parties?

Until October 2013, the Equality Act 2010 contained express provisions making employers liable for harassment of their staff by third parties (e.g. contractors, clients, delegates at a conference or members of the public), although liability only arose where the worker had been harassed on at least three occasions.  These provisions were repealed by the Coalition Government on 1 October 2013, with the result that it became much more difficult for workers to bring claims against their employer where they had been harassed by a third party.

When the Act was on its passage through Parliament, it was envisaged that it would make employers directly liable for the sexual harassment of workers by third parties, from the first time that the harassment occurred.   However, the third-party harassment provisions were dropped, again, out of a concern that they would be too onerous for employers, particularly those in the hospitality sector.  

Therefore, the position regarding employer’s liability for third party harassment will remain unchanged.  There is no specific legal protection, however, workers who are sexually harassed by third parties may be able to bring other claims against their employer in certain circumstances.  For example, individuals could argue that their employer’s failure to take reasonable steps to protect them from third party sexual harassment amounts to:

• a serious breach of contract entitling them to resign and claim constructive unfair dismissal (currently, an employee would need  two years’ service to bring this claim); or

• direct or indirect discrimination on the grounds of a protected characteristic such as sex, sexual orientation or disability (there is evidence to show that women, LGBT and disabled people are more likely to suffer sexual harassment at work).

Putting aside the risk of direct claims against the employer, the EHRC makes it clear that the new duty to prevent requires employers to take steps to prevent sexual harassment committed by third parties.  A failure to do so would give rise to a breach of duty, which could lead to enforcement action by the EHRC (this is discussed further below).

It should also be noted that the new Labour Government has promised to introduce direct legal protection from third party harassment.  Again, this would need an amendment to the Act, and it is not yet known when this change will be made (and, again, it seems unlikely that it will be made before the duty comes into force).    

What information is there for employers on how to comply with the new duty?

On 9 July 2024, the EHRC opened a consultation on changes to its Technical Guidance on Sexual Harassment and Harassment (the Guidance) to reflect the new duty.  The consultation will run for four weeks, closing on 6 August 2024.  The Guidance explains the new duty and, crucially, sets out the steps that employers are expected to take to discharge the duty.  

It is important to note that the Guidance is just that – it does not have the status of a “Statutory Code”.  This means that Employment Tribunals are not obliged to take it into account in relevant cases.  That said, it may still be used as evidence in legal proceedings.  For that reason, employers would be wise to apply the recommendations in the Guidance as far as possible.  Separately, the EHRC has said it intends to update its existing Employment Statutory Code of Practice “in due course” to reflect the new duty.

When will a preventative step be “reasonable”?

The Guidance explains that employers are required to take reasonable steps and what is reasonable will vary from employer to employer and will depend on factors including, but not limited to, the following things:

• the employer’s size;

• the sector it operates in;

• the working environment; 

• particular risks present in the workplace; and

• the likelihood of workers coming into contact with third parties, and the types of third parties that they might come into contact with.

Taking these factors into account, an employer must consider the risks of sexual harassment arising in the course of employment and the different steps that it could take to prevent it from happening.  It must then assess which of those steps would be reasonable for it to take and implement them.  When making this assessment, the time, cost, potential disruption and likely effectiveness of the proposed steps are all relevant considerations. However, it is important to remember that it may still be reasonable to take a step even if might not be effective in preventing the harassment. 

What kinds of steps should employers consider taking in order to discharge the duty?

The Guidance recommends that employers should take the following types of preventative steps:

• Have a good suite of policies in place.  Employers should have separate policies for sexual harassment and other forms of harassment (or have one clearly delineated policy).  Such policies should also cohere with other relevant policies such as disciplinary, social media and health and safety policies.

• Raise awareness of the anti-harassment policies amongst the workforce and third parties. This could mean requiring employers to provide copies to staff at regular intervals and before events where harassment has occurred in the past (e.g. Christmas parties).  The policies should be adapted as appropriate and also shared with third parties such as clients and contractors.  Third parties should be alerted to the employer’s expectations around the treatment of staff and the consequences of any harassment (e.g. in any contractual terms with the third party, or by way of a sign visible in the workplace).

• Review the anti-harassment policies on a regular basis.  Policies should have an annual health check and be updated to reflect any legal changes and trends apparent from internal complaints, staff surveys and/or exit interviews.  Policies should also be reviewed after any significant incident of sexual harassment occurs.

• Put in place methods to detect harassment (including third party harassment). This could include informal one-to-ones, sickness return to work meetings, exit interviews and external reporting systems which allow anonymous reports.  We have previously reported on how some employers are making use of apps which permit real time and anonymous reporting of sexual harassment.

• Provide high-quality and regular harassment training to staff.  As an important EAT decision highlighted, an employer will not have taken reasonable steps if the training it provides to staff does not pass muster.  This training should cover both prohibited conduct and encourage staff to engage in respectful and safe behaviours at work.  Such training should also be tailored to the sector and audience, with more comprehensive training provided to those in leadership and HR roles.

• Assess the risk of sexual harassment. Employers must interrogate the risk of sexual harassment in their organisation and the steps that could be taken to eliminate or minimise such risks.  Common risk factors include: job insecurity, lone working, the presence of alcohol, customer-facing duties, gender imbalanced workforces and workers being placed on secondment.

• Take steps to address power imbalances. Harassment often takes place and goes unreported where there are power imbalances in the workplace. For example, between senior and junior workers, where workers with particular protected characteristics are in a minority in the workplace or where workers are in insecure employment. Employers should consider what actions they can take to reduce such power imbalances.

• Deal with harassment complaints effectively. This includes taking appropriate and consistent disciplinary action against the perpetrators of harassment.  Those who engage in unlawful conduct should not be protected, rewarded or promoted, regardless of their importance to the organisation.  Where the perpetrator is a third party, in some cases this may mean ending the relationship with them.

What other steps could employers consider taking?

There are, of course, many other steps that employers could consider taking to help discharge the new duty.  Australia has had a similar duty to prevent in place since 2022 and the Australian Human Rights Commission has issued extensive guidelines on the steps needed to discharge that duty.  Some of the most interesting suggestions are set out below.

• Require senior leaders to be involved in the development and oversight of a compliance plan, including regular reviews of whether the chosen steps have been effective.

• Require senior leaders to lead on workplace communications about the duty, to act as role models and to be responsible and accountable for compliance with the duty (with consequences for failure built into their employment contracts and remuneration packages).

• Consult with staff to obtain their views on where the risks lie and what measures would be effective to prevent sexual harassment.

• Encourage staff to call out both positive and unacceptable behaviour and recognise those who do so, for example, in appraisal and promotion processes.

• Make support options available for staff.  This can include both internal support options (e.g. a named member of HR or a mental health champion) and external support options (e.g. an Employee Assistance Programme or free advice line).

• Have multiple reporting pathways (e.g. online, in person, anonymously, externally) and ensuring that these are communicated to staff in a variety of ways.

What are the consequences of breaching the duty?

Enforcement action by the EHRC

Where an employer fails to comply with the duty (or there is a suspicion that this is the case), the EHRC will be able to take enforcement action against them.  This includes powers to:

• investigate the employer;

• issue an “unlawful act notice” which confirms that the employer has breached the duty and requires it to prepare an action plan setting out how it will remedy the breach and prevent future breaches;

• enter into a legally binding agreement with the employer to prevent future unlawful acts; and/or

• ask the court for an injunction to restrain an unlawful act.

The EHRC’s enforcement action is in the public domain, with details of their current and past investigations held on their website.  This raises an important point for employers to note when it comes to settling claims of sexual harassment.  Employers are not allowed to use settlement agreements to gag workers from blowing the whistle about various forms of malpractice. The EHRC is a “prescribed body” for whistleblowing about breaches of equality law, which means that workers are entitled to make whistleblowing disclosures to them about such breaches. Therefore, even after a settlement agreement has been signed, a worker will remain entitled to blow the whistle to the EHRC about a breach of the duty which, in turn, could lead to enforcement action attracting negative publicity.

Uplift to compensation

Where an individual brings a claim against their employer and the Employment Tribunal finds that they were subjected to sexual harassment it must consider whether, and to what extent, the employer has breached the legal duty to prevent sexual harassment.  Where a Tribunal concludes that the employer has breached the duty, it may award an uplift to the compensation award.  Any uplift must correlate to the extent of the employer’s breach but may not exceed 25%.  

Where there is no claim before an Employment Tribunal, it will not have jurisdiction to rule on whether an employer has breached the duty to prevent.  In this situation, the employer’s duty may only be enforced by the EHRC as discussed above.

Next steps for employers?

Employers wishing to respond to the EHRC’s consultation can do so here before 6 August 2024.  The final Guidance should be published in good time before the duty comes into force on 26 October 2024.  In the meantime, employers should consider how to address the risk of sexual harassment of staff and assess which steps would be reasonable for it to take.  A good starting point – and one almost all employers will need to take – would be to review and update internal policies and refresh training for all staff.    

BDBF is a law firm based at Bank in the City of London specialising in employment law.  If you would like to discuss any issues relating to the content of this article, please contact Principal Knowledge Lawyer Amanda Steadman (amandasteadman@bdbf.co.uk) or your usual BDBF contact.

EHRC – Consultation on changes to the Technical Guidance on Sexual Harassment and Harassment at Work (9 July 2024)

EHRC – Technical Guidance on Sexual Harassment and Harassment at Work (January 2020)