Vicarious liability

02 October 2003 by
Vicarious liability

The problem

A local company, a big customer, hired your restaurant for its summer party. Everyone was having a good time until one of the guests racially insulted one of the waitresses. The waitress is now claiming that this was your fault and is seeking legal advice. Are you liable, and what should you have done?

Expert Advice

Until recently, the courts held that, where any employer becomes aware of their workforce being subjected to offensive behaviour by a customer, it should consider removing the staff and asking the customer to leave.

If harassment occurred in circumstances where you could have stepped in and prevented it, you would have been vicariously liable for racial harassment or discrimination. If your employee felt unable to continue in your employment and resigned as a consequence of the act of harassment, you might additionally be liable for her or his unfair constructive dismissal.

However, following comments of the judges in the recent House of Lords case of MacDonald v Advocate General for Scotland, it would appear that the law has changed. It is possible that an employer would now be liable only if his refusal to intervene was itself based on discrimination.

Expert advice

Best practice dictates that, where possible, an employer removes an employee from any situation where he or she is the target of racial or sexual harassment. If the employer does not do so, because he discriminates against that employee (he would have removed another employee in similar circumstances), the employer may be liable.

If the employer does nothing but would have treated all his employees in the same way, he will not be liable. The same would apply if an employee were subjected to discrimination by a fellow member of staff.

If, however, a member of staff insults a guest, the rule is that if the guest has a right to sue the employee, he or she will be able to sue the employer even where the employer has made it quite clear to the staff that such behaviour is unacceptable.

However, where the insult would not give rise to a right of action against the employee, the employer will not be liable.

There is no right of action in respect of insults which are not defamatory or discriminatory on the grounds of sex, race or disability, nor any right to sue for hurt feelings in these circumstances.

Check list

  • Was the claim launched within the time limit allowed by the relevant Act of Parliament? This is three months from the alleged act of sex, race or disability discrimination or harassment.
  • Make sure that you have employment policies in place to deal with the issues of harassment and discrimination on the grounds of sex, race and disability, and which make it clear that such discrimination by employees is likely to result in disciplinary action, including dismissal.
  • If you have policies, make sure your employees are aware of them and that they are implemented consistently.

Beware!

If you have no employment policies in place to deal with issues of discrimination or harassment on the grounds of sex, race or disability, and/or your anti-discrimination or anti-harassment policies are not consistently applied, you are without the basic defence to an action of this kind.

Contacts

Antonia Brandes
Fladgate Fielder
020 7323 4747
abrandes@fladgate.com

British Hospitality Association
020 7404 7744
www.bha-online.org.uk

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