FOR EDUCATIONAL USE ONLY 34 Indus. L.J. 261 Industrial Law Journal September, 2005 Recent Case Edited by M.R. Freedland and Simon Deakin Note *261 THE PROTECTION FROM HARASSMENT ACT ENTERS THE WORKPLACE Brenda Barrett Middlesex University Copyright © 2005 by Industrial Law Society; Brenda Barrett Majrowski v Guy's and St Thomas's NHS Trust [2005] EWCA Civ 25; [2005] ICR 977; [2005] IRLR 340 (CA) Banks v Ablex Ltd [2005] EWCA 173; [2005] ICR 819; [2005] IRLR 357 (CA) 1. INTRODUCTION In an important decision in Majrowski v Guy's and St Thomas's NHS Trust the Court of Appeal considered the general issue of an employer's vicarious liability for an employee's breach of a statutory duty placed only on the employee personally. It then considered vicarious liability in the context of duties placed on an employee by the Protection from Harassment Act 1997 (referred to as 'the 1997 Act'). Interestingly the hearing occurred in November 2004 but the decision was not published till 16 March 2005. The report of Banks v Ablex Ltd was published earlier than that of Majrowski (25 February 2005). There is no cross referencing between it and Majrowski. It is noted here because it provides an example of circumstances in which an employee may rely on the 1997 Act. 2. THE MAJROWSKI CASE Mr Majrowski alleged that when he was employed by the Trust he was bullied, intimidated and harassed by his departmental manager while acting in the course of her employment. He claimed the hospital was vicariously liable for the manager's breach of the statutory duty imposed on her personally by section 3 of the 1997 Act. He made no claim against the Trust in negligence or for breach of contract. Nor did he claim directly against the manager herself. When he presented his claim to the County Court it was struck out. Judge Collins considered there were no reasonable grounds for relying on the 1997 Act when making a claim for workplace harassment. His Honour's reasoning may be summarised: The purpose of the Act was to penalise individuals: it could not be assumed that Parliament intended employers to be vicariously liable; As a matter of construction of the Act a claim lay only against an individual, or possibly a corporation acting through someone as its 'controlling mind'; and

*262 Parliament did not intend the Act to create another level of liability in employment law where the common law provided adequate remedies. He nevertheless granted the claimant permission to appeal to the Court of Appeal because there was a point of law to be authoritatively determined. It followed that if the Court of Appeal found in favour of the claimant on the law the case could proceed to trial to establish liability on the alleged facts. 3. THE BROAD ISSUE In the Court of Appeal Auld LJ pointed out that there was no English authority that determined the broad issue of whether an employer could be vicariously liable for an employee's breach of a statutory duty imposed on the employee personally. This issue had been considered by the House of Lords in three English appeals (all of them shot firing cases) but on each occasion it had left the matter open. In Harrison v NCB [1951] AC 639 Lord MacDermott had rejected, obiter, an argument that an employer could not be held vicariously liable for the statutory tort of its employee, saying this: as a general proposition finds no support in principle or authority. Vicarious liability is not confined to common law negligence. It arises from the servant's tortious act in the scope of his employment ... (at p 671) Lord Porter expressed 'some sympathy' with this view (at p 659) and Lord Reid similarly said he would not 'dismiss summarily' the issue (at pp 687- 8). In the Scottish case of Nichol v NCB (1952) 102 LJ 357 Lord Guthrie followed Lord MacDermott's reasoning and held there was such liability, saying: The firing of the shots was the work which he was employed by the defenders to do. His failure to take the precautions which Parliament has required of him did not take him outwith the scope of his employment. Accordingly his acts were still within the area in which the vicarious responsibility of a master operates. In the English case of National Coal Board v England [1954] AC 403 the issue was reserved but Lord Oaksey (at pp 421-2) approved Lord Guthrie's judgment saying: Unless there is something in the statute which creates the obligation indicating the intention that no action shall be brought at common law in respect of its breach, the ordinary rules of the common law of tort are applicable, including the doctrine respondeat superior. Yet again the issue was touched on but not resolved in Imperial Chemical Industries Ltd v Shatwell [1965] AC 403. Auld LJ noted that leading texts supported the view that vicarious liability applied generally to statutory torts committed in the course of employment save where the wording of the statute directed otherwise or there was a good policy reason not to apply it. (P.S. Atiyah Vicarious Liability in the Law of Torts (1967) at pp 280-4; Clerk & Lindsell on Torts (18th edn, 2000) at paras 5.46 and 5.47; Munkman on Employer's Liability, 13th edn at paras 4.63 and 6.79). *263 His Lordship considered the following general principles and/or policies concerning vicarious liability could be derived from the case law and the texts: -- It is legal responsibility imposed on a blameless employer, for a tort committed by an employee in the course of employment.

-- It has traditionally taken two forms namely; liability for an authorised or negligently permitted unlawful act of an employee and second, liability for an employee's unauthorised or not negligently permitted unlawful mode of doing an authorised act. His Lordship remarked 'Only the latter is truly vicarious liability; the former is primary liability' (at para 29). -- The employee's wrongful act must be so closely connected with what he is authorised to do (see Lord Steyn in Lister v Hesley Hall [2001] UKHL 22) that it could rightly be regarded as a mode, even if an improper one, of doing it. -- Applying the 'close connection' test brings into play the compromise (noted by Fleming in The Law of Torts, 9th edn (1988) pp 409-10) between the conflicting policies of enabling the victim to have recourse against a financially responsible defendant and protecting the business enterprise from undue burdens. Considering the case law and the literature and relying heavily on the opinions of their Lordships in Lister, on vicarious liability at common law, Auld LJ believed the ultimate question was whether the employee's torts: were so closely connected with his employment that it would be fair and just to hold the employers vicariously liable. His Lordship concluded: The development of the jurisprudence that I have charted, strongly influenced by academic authority of great distinction ... has freed the courts from the tight, but not always readily applicable, constraint of Salmond's traditional test of 'in the course of employment', and has substituted for it a test of fairness and justice, turning, in the circumstances of each case, on the sufficiency of the connection between the breach of duty and the employment and/or whether the risk of such breach was one reasonably incidental to it. ... it is now clear that, in general, an employer may be vicariously liable for a breach of statutory duty imposed on his employee, though not on him, if it meets the new broader test. ... it is immaterial whether the conduct in respect of which a claimant seeks to hold an employer to account is a breach of a common law or statutory duty, and whether or not it is a criminal offence as well as a civil breach. (paras 37-8) May LJ and Scott Baker LJ both agreed with Auld LJ's exposition of and conclusion on this issue. 4. THE NARROW ISSUE: CONSTRUCTION OF THE 1997 ACT The court now had to decide whether the 1997 Act enabled claims against employers in respect of their employees' harassment of third parties, including employees. Section 1 of the Act prohibits harassment, section 2 imposes criminal liability for breach of section 1, and section 3 provides that a victim may obtain compensation from the wrongdoer. The *264 issue was whether an employer may be vicariously liable to compensate a victim for harassment committed by one of its employees in breach of section 3.

-- employers would be more likely to introduce policies to reduce harassment in the workplace; -- there must have been a reason for introducing the statutory tort when there were already common law remedies; one reason may be to ensure the availability of a solvent defendant; another reason may be that section 3(2) the 1997 Act, unlike the common law, provides damages for 'any anxiety caused by the harassment'--ensuring the law is consistent regarding secondary liability for different torts. This counsel therefore submitted there was no indication that Parliament had intended to restrict recovery under the Act by excluding vicarious liability. On the contrary such restriction would have been contrary to its clear purpose and policy, which was to increase the protection afforded to victims of harassment. On the other hand counsel for the employer argued that the broad principle of vicarious liability had to be qualified by the statutory context in which the unauthorised act occurred and he cited statutory employment law as an obvious context for the application of this qualification. He also argued that the 1997 Act was concerned with public order and was directed mainly at stalking. It had nothing to do with management behaviour and workplace relationships. He further suggested that the 1997 Act was in danger of becoming: an all-too-convenient by-pass of the ordinary common law constraints on stress-at-work claims, in which; (1) claimants need not prove foreseeability of harm or personal injury; (2) where anxiety will substitute for a recognisable psychiatric condition; and (3) where, by virtue of section 11(1A) of the Limitation Act 1980, the ordinary three-year rule of limitation for personal injury claims has been disapplied, so as to double it to six years. He added that such claims do not attract compulsory employer's liability cover under the Employers' Liability (Compulsory Insurance) Act 1969. (para 48) Auld LJ noted that discrimination legislation expressly rendered employers civilly liable for discriminatory acts of their employees in the course of their employment, whereas the 1997 Act was silent on this matter. Arguably it had been considered necessary to spell out the boundaries of employer's liability in legislation such as the Race Relations Act because claims under that Act and other cognate legislation are litigated in tribunals whereas the 1997 Act is enforced in common law courts, which are familiar with principles of vicarious liability. On the other hand, showing that every statute had to be considered in its own context, in Hilton International Hotels v Protopapa [1990] IRLR 316 (a constructive dismissal case) the EAT rejected a submission that the absence of any provision for vicarious *265 liability in the Employment Protection (Consolidation) Act 1978 indicated that the general rules of employer's vicariously liability did not apply. On the particular issue of whether the 1997 Act should be construed so as not to apply to employers of harassers he kept in mind that this issue arose not only where an employee harassed another employee, but also where an employee, in the course of his employment, harassed an outsider, say a customer of his employer. It therefore related to public as well as employer's liability.

As a preliminary issue Auld LJ noted that a victim of harassment may already establish liability in an employer. Such liability may be primary (either for breach of contract or in the tort of negligence). Alternatively liability may be secondary, that is vicarious, (at common law) for an employee's act of victimisation or harassment committed in the course of employment. His Lordship noted the arguments of counsel related to the extension of these principles to breaches of statutory duty.

Although the 1997 Act had its genesis in the need to curb stalking, in Thomas v News Group Newspapers Ltd [2001] EWCA Civ 1223 the Court of Appeal conceded that it was not concerned solely with stalking but could even apply to harassment through publication of press articles. Further, the workplace is the very place where harassment is often encountered and from which its victim is often powerless to escape. It is often likely to be a risk incidental to employment. In Waters v Commissioner of Police for the Metropolis [2000] 1 WLR 1607 the House of Lords held that a common law claim against the Commissioner in negligence for harassment of one of his officers by fellow officers was arguable. Why, his Lordship asked, should the answer be any different if the claim is couched as breach of statutory duty under the 1997 Act?

Counsel for the claimant submitted that there were policy reasons favouring such liability which, in summary were:

There were a number of safeguards for employers against the 'floodgates' argument. Firstly the Act (s 1) prohibits 'a course of conduct', so it does not

impose liability for a single act of harassment. Second, to succeed in claims under section 3 the claimant must establish to an objective standard that the conduct amounts to harassment; usually this means it is likely to alarm or cause the claimant distress (see ss 1(2) and 7(2)). Third, the conduct, looked at in the statutory context making it unlawful, must make it just and reasonable in the circumstances of the case to compensate the claimant by application of the criterion of 'close connection' with the employment. In employment law it may be particularly important to consider 'whether, looking at the matter in the round, it is just and reasonable to hold the employers vicariously liable' (per Lord Steyn in Bernard v The Attorney General of Jamaica (Privy Council Appeal No 30 of 2003)) for, say, harassment by an employee whom it has put in a position of authority over other employees, or in a position to exploit third parties such as customers. Auld LJ considered that: If, for want of [good working] practices or procedures falling short of negligence, or if, despite them, the nature of the employer's undertaking and/or circumstances of a claimant's exposure to his employees' conduct are such as, in the view of the court, to render harassment in breach of the Act a reasonably incidental risk of the undertaking and/or employment, it may consider it just and reasonable in the circumstances to hold the employer vicariously liable. (para 59) His Lordship dismissed the second of the county court judge's reasons for striking out the claim. He did not accept that a corporate employer could not be a 'person' capable of incurring liability under the Act. Nor did he accept that as section 2 made criminal the conduct prohibited by the Act it followed that the reasoning in Tesco Supermarkets Ltd v Nattrass [1972] AC 53 applied so that the employer could only be liable for the unauthorised offence of his employee if the employee were the governing mind of the company. In any case it was well established that an employer may be civilly responsible for its *266 employee's unauthorised conduct, even though it constitutes a crime (eg Lister v Romford Ice [1957] AC 555) and this even if it could not be vicariously guilty in criminal proceedings. Auld LJ concluded that the Judge was wrong to strike out the claim under the 1997 Act on the basis that the Act did not permit the imposition of vicarious responsibility for breach of its provisions. May LJ supported Auld LJ's finding that vicarious liability could be imposed under the 1997 Act but stressed the 'two clear control mechanisms' (at para 80) to limit the circumstances in which vicarious liability could be imposed. First although section 7(2) of the Act provides that harassing a person includes causing that person distress, that the defendant has caused the claimant distress was not by itself enough to establish harassment. To create liability the defendant's conduct had in an objective sense to cause distress and be oppressive and unreasonable. He said: It has to be conduct which the perpetrator knows or ought to know amounts to harassment, and conduct which a reasonable person would think amounted to harassment .... Employees may be distressed, and understandably so, by managerial conduct which, for instance, being properly and reasonably critical of an employee's poor performance, is entirely within the proper and reasonable scope of the manager's functions and duties. (para 82) Moreover, the facts that the conduct that constitutes a civil wrong under section 3 may lead to both a criminal conviction under section 2 and the award of an injunction should reinforce the view of a reasonable person that harassment is serious conduct. The second control mechanism was to be found in the words of Lord Steyn in Bernard: The correct approach is to concentrate on the relative closeness of the connection between the nature of the employment and the particular tort, and to ask whether looking at the matter in the round it is just and reasonable to hold the employers vicariously liable. (at para 18)

There has to be a sufficiently close connection between the work which the employee is employed to do and the particular tort of harassment. His Lordship, while saying it was dangerous to postulate hypothetical facts as examples, went on to provide the following useful suggestions: if two employees, neighbours perhaps, who have a confrontational relationship outside and unconnected with their work, continue the confrontation at work so that one harasses the other, there would be no sufficient close connection between the nature of their employment and the harassment. By contrast, if a manager is alleged in the course of management to have harassed a subordinate, this may, depending on the facts, give rise to vicarious liability. (para 87) Scott Baker J delivered a dissenting judgment on the narrow issue of whether an employer could be vicariously liable under the 1997 Act. He considered that if the draughtsman had intended to create vicarious liability he would have said so. He pointed out that: If the approach proposed by Auld LJ is correct it follows that every case in which it is alleged the perpetrator of the harassment was acting in the course of his employment will have to be examined on the facts for the court to decide whether it would in all the circumstances be just and reasonable to impose vicarious liability on the employer .... The alternative is that on its true construction the 1997 Act does not envisage the imposition of vicarious liability in *267 any circumstances and the judge should, as Judge Collins did, dismiss the claim without embarking on any fact finding exercise at all. (para 103) He believed that imposing vicarious liability on employers under the 1997 Act would be a considerable extension of employer's common law liability. He noted that there was a lower threshold for damages under section 3 of the Act; it allowed damages for causing anxiety. He believed that the 1997 Act would open the floodgates to stress claims. The just and reasonable test would not be an adequate control mechanism, whereas there were in place in stress at work cases a number of control mechanisms in the sixteen proposition set out by Hale LJ in Hatton v Sutherland [2002] 2 All ER 1. He would not have expected Parliament to create such a substantial extension to an employer's liability 'as it were, by a side wind' (para 106) He believed the common law of negligence provided claimants with an adequate framework for claiming damages against employers for injury caused by stress at work in the nature of harassment. He concluded: I regard it as difficult to envisage circumstances in which it would be just and reasonable to hold an employer vicariously liable and I do not think, viewing the statute as a whole, that it was Parliament's intention that an employer should be vicariously liable. (para 113) 5. THE BANKS CASE The claimant was employed at the defendant's factory between 1993 and 1998. After leaving the employment she was found to be suffering from a depressive disorder. She sued the defendant; the proceedings were complex and the case was before the county court twice. For present purposes the only point of interest is that she claimed that a maintenance engineer [Briggs] harassed her over a period of time and finally subjected her 'to an incident of harassment and/or aggression in which he shouted, swore and gesticulated at her'. For this she sought damages for 'the statutory tort of harassment'. The county court judge dismissed her case. He did not accept either that there had been harassment before an incident in October or that what happened then constituted the course of conduct needed to establish the statutory tort. He found that while Briggs was given to ill-tempered outbursts there was no evidence that they were targeted at the claimant as opposed to anyone else or, indeed, inanimate

tools and equipment. Briggs' outbursts were intended to give vent to his frustrations, not to cause alarm or distress to others. The claimant 'was a woman of strong character, not easily upset, a person who gave as good as she got when it came to the deployment of industrial language'. The claimant's grounds for appeal to the Court of Appeal were, in summary: If the judge had sufficiently examined the evidence of the conduct of Briggs over a period of time he would have concluded that it amounted to the statutory tort, even if there was no proven intent to harm. In the alternative the conduct of Briggs on one particular evening (13 October 1998) amounted to the tort. Once this was shown liability had to follow because the claimant did not have to prove foreseeability. Vicarious liability was inevitable unless Briggs was acting outside the scope of his employment. *268 In the Court of Appeal Kennedy LJ delivered a judgement with which Longmore and Kay LJJ agreed. He quickly dismissed the alternative claim because he believed it beyond argument that harassment consisted of a course of conduct so there could be no claim based on behaviour on one occasion (at para 20). He then went on to find there was no evidence of harassment before this time. His Lordship concluded that it was: absolutely clear that nothing occurred prior to 14 October 1998 which could properly be described as harassment of the claimant by Briggs, and even if Briggs' conduct on 14 October could be so described the statutory tort was not proved because the misconduct amounting to harassment of the claimant did not occur on two occasions. (at para 33) Turning to the primary liability of the defendant for negligence he found it had no reason to foresee that the claimant was at risk of suffering injury to mental health. He dismissed the appeal. 6. CONCLUSION The most significant outcome of these cases is clearly the decision on the broad issue that an employer can be vicariously liable for breach by an employee of a statutory duty imposed on the employee. It is, at first sight, surprising that in English law there has been no ruling on this until now. It is interesting to note that the fifty year old cases which inconclusively considered the matter were all dealing with shot firing regulations made under health and safety legislation. Possibly the reasons that the matter has not been resolved by later case law in this context are that reliance on these regulations is less today partly because of a decline in mining and partly due to different systems of work. It is also possible that, because the general duties under the sections 2 and 3 of the Health and Safety at Work Act 1974 are so broad, it is much easier than formerly to attach primary criminal liability to an employer for failure to set up and maintain systems of work that ensure that the employees properly perform the tasks assigned to them. Case law was already moving in this direction (see R v British Steel plc [1995] 1 WLR 1356) before the reissued Management of Health and Safety at Work Regulations 1999 (SI 1999/34242) introduced a rule in Regulation 21 that an employer could not plead the act or default of an employee as a defence in any criminal proceedings. Section 47 of the 1974 Act provides an employer cannot be sued for damages caused by breach of the general duties, but there is no longer protection from such liability under the 1999 Regulations. As these Regulations require an employer to carry out assessments to ensure the performance of the general duties, the victim of an employee's wrongdoing could possibly rely on them in a civil court to claim damages for injury suffered as a result of an employer's failure to ensure employees performed their statutory duties. As the Court of Appeal pointed out in Majrowski, discrimination law has

expressly referred to the employer's liability for the unlawful conduct of an employee. Arguably, however, section 32 of the Race Relations Act 1976 and section 41 of the Sex Discrimination *269 Act 1975 are more in the nature of the imposition of strict primary liability on the employer than true examples of vicarious liability. It remains to be seen whether the Court of Appeal's extension of the potential for employers to be vicariously liable for an employee's breach of statutory duty will result in a significant increase in litigation. Whether it does must depend firstly on whether there are many situations where the only relevant duty is a statutory one placed on the employee and second whether when such situations are identified the courts are prepared to find that, as a matter of policy, the particular statute should be interpreted to permit vicarious liability. The decision in Majrowski that the Protection from Harassment Act 1997 is a statute to which the broad principle of vicarious liability applies does appear to open the floodgates to claims for harassment. It has the advantages that liability is strict so the claimant does not have to prove the employer's conduct was negligent; claims can be made where the damage is less than psychiatric injury, all that is necessary is that anxiety can be shown, and the normal limitation period does not apply. It is easy to sympathise with Scott Baker LJ's dissenting judgment that Parliament could not have intended to so extend employer's liability by a 'side wind'. As his Lordship rightly points out every case will have to be considered on its own facts to determine whether the harassment is sufficiently closely connected with the wrongdoer's employment to warrant imposing vicarious liability on the employer. In this respect at least this litigation will share something with the traditional stress cases where liability also depends on a close analysis of the particular facts. The major distinction between claiming in negligence and claiming under the 1997 Act appears to be that in the former, but not in the latter, the claimant needs to establish that the situation was foreseeable to the employer. However, it can be argued that the requirement that the wrongdoing be closely connected with the employment makes it more likely that there will be vicarious liability only where the potential for harassment is foreseeable. The other control stressed by May LJ, that objectively it must be fair and reasonable to impose liability on the employer, could also come back to considering what was foreseeable. It is clear that in future in making a risk assessment an employer will be wise to consider whether any employees are placed in a position where, due to their management responsibilities or their contact with vulnerable members of the public, they have the incentive or opportunity to harass. The situations that should be of most concern to employers are those in which an employee's role is to secure performance from another. This could for example be that a manager has to get work out of a subordinate or a 'collector' has to get rent or other payments from a client. In these situations the defaulter may well feel harassed. It is interesting that in Majrowski the court specifically proposed an objective test of whether a reasonable person would consider properly pursuing such a legitimate objective was harassment. The best advice to employers would seem to be that the entry of the 1997 Act to the workplace opens the floodgates for training to ensure that employees are equipped to pursue legitimate objectives without harassment. END OF DOCUMENT