Under the Equality Act 2010, in Great Britain (with equivalent legislation applying to employers in Northern Ireland), any unlawful discrimination carried out by an employee in the course of their employment is treated as having also been done by the employer, regardless of whether the employee's acts were done with the employer's knowledge or approval. This is known as employer ‘vicarious liability’. However, there is a defence available to an employer if it can show that it took all reasonable steps to prevent the employee from doing the discriminatory act, such as providing regular training on discrimination and having up to date policies. However, this can be a difficult defence to run in practice and, in reality, businesses often choose not to rely on it, as the defence would not protect senior employees who may be responsible for discrimination. This is because individual employees who acted in a discriminatory way can also be personally liable for their actions at an employment tribunal. Where the tribunal finds an employee liable for discrimination, it must decide whether to order the employee and/or the employer to pay compensation, and the amount of any such compensation.
In most cases it is a legal requirement for employers to have Employer’s Liability Insurance in place, which can protect employers and senior staff from the costs of a tribunal award and the cost of legal representation up to the level of the insurance indemnity in the event of an employment tribunal claim. Additionally, directors' and officers' insurance policies can cover the legal costs and awards of damages associated with defending proceedings against individual directors. Whilst it is not a statutory requirement, it is strongly recommended that all employers implement an equal opportunities or dignity at work policy and then give managers and employees regular training on the provisions of that policy; as this can help prevent discrimination in the workplace from occurring.
A recent employment tribunal case is a demonstration of this dual liability. In this case, an employment tribunal upheld a disability discrimination claim against the employer (on the basis that the school was vicariously liable for the discriminatory acts of its employees), but dismissed separate discrimination claims brought against the two employees who had carried out the discriminatory actions, saying that the discriminatory acts that they had carried out were misguided attempts to address a complex situation.
On appeal, the Employment Appeal Tribunal found that the tribunal was wrong to dismiss the claims against the individual named employees, as the tribunal did not have any discretion around this. The Employment Appeal Tribunal commented that although the findings of discrimination against the members of staff may be harsh, nevertheless the legislation is clear in its meaning and effect. Accordingly, the Employment Appeal Tribunal ruled that the two individual employees were liable in respect of their acts, as well as the employer.