ON APPEAL FROM the Employment Appeal Tribunal
HH Judge Richardson and lay members
Royal Courts of Justice
Strand, London, WC2A 2LL
B e f o r e :
LORD JUSTICE MOYLAN
| UNITE THE UNION
|- and -
Mr Bruce Carr QC and Mr James Wynne (instructed by Richard Slade & Company) for the Respondent
Hearing date: 25th January 2018
Written submissions: 31st January 2018
Crown Copyright ©
Lord Justice Underhill:
(1) Sex Discrimination. The Claimant alleged that both the lay officials' conduct and the employed officials' conduct constituted direct discrimination because of her sex contrary to section 39 (2) of the 2010 Act. She said that the Union was liable for the acts of the various individuals under section 109 of the Act, which governs the liability of employers and principals for the acts of their employees and agents. That was obviously the case as regards the employed officials since they were employed by the Union, and so fell within section 109 (1); but she said that Mr Saini and Mr Coxhill were also its employees, within the extended definition in section 83 of the Act, alternatively that they were its agents and so fell within section 109 (2).
(2) Harassment. In the alternative the Claimant relied on the same acts as constituting unlawful harassment related to her sex contrary to section 40 (read with section 26) of the 2010 Act.
I should add for completeness that the Claimant also alleged that her resignation was in response to the conduct of both the lay and the employed officials, which amounted to a repudiatory breach of contract, and accordingly that she had been constructively dismissed and that that dismissal was unfair. She also claimed that her resignation amounted to a constructive dismissal and that this was a distinct act of sex discrimination.
Harassment (Issues 11-15)
(1) The lay officials' conduct. The ET found that Mr Saini and Mr Coxhill had harassed the Claimant within the meaning of section 26. It found that the Union was liable for that harassment because the lay officials were indeed "employed" by it within the meaning of the extended definition, but it found in the alternative that they were its agents within the meaning of section 109 (2).
(2) The employed officials' conduct. It found that the employed officials' conduct also amounted to harassment.
Discrimination (Issues 8-10)
(3) The ET found that both the lay officials' and employed officials' conduct would have constituted unlawful sex discrimination contrary to section 39 (2) (d) of the Act, which covers discriminatory "detriments"; but that it did not do so because of the "anti-overlap" provision of section 212 (1), which provides that "'detriment' does not … include conduct which amounts to harassment".
It upheld the claims of unfair and discriminatory dismissal.
(1) The lay officials' conduct. It did not challenge the finding that Mr Saini and Mr Coxhill had harassed the Claimant within the meaning of section 26 of the 2010 Act. But it challenged the finding that it was liable for that conduct whether on the basis that they were its employees or its agents.
(2) The employed officials' conduct. It challenged the finding that the conduct in question constituted unlawful harassment.
It also challenged the finding that the Claimant was able to rely on her (constructive) dismissal as a distinct act of sex discrimination.
A: THE UNION'S LIABILITY FOR THE CONDUCT OF THE LAY OFFICIALS
THE BACKGROUND LAW
"(1) Anything done by a person (A) in the course of A's employment must be treated as also done by the employer.
(2) Anything done by an agent for a principal, with the authority of the principal, must be treated as also done by the principal.
(3) It does not matter whether that thing is done with the employer's or principal's knowledge or approval.
(4) In proceedings against A's employer (B) in respect of anything alleged to have been done by A in the course of A's employment it is a defence for B to show that B took all reasonable steps to prevent A -
(a) from doing that thing, or
(b) from doing anything of that description."
(1) The phrase "with the authority of the principal" in sub-section (2) might at first sight appear to connote a specific authorisation to do the act complained of; and that would not be an unexpected provision since at common law such authorisation is the main basis on which a principal may be liable for a tort committed by his agent (see Bowstead and Reynolds on Agency (21st ed) article 90 (2) (a)). But that construction is negated by sub-section (3), which makes it clear that an act may be done with the principal's "authority" for the purpose of sub-section (2) even though he or she has no prior knowledge of it. The effect of the sub-section, having regard to sub-section (3), was considered in Kemeh, with which I deal in the following paragraphs: see in particular para. 19.
(2) The "reasonable steps" defence in sub-section (4) is available only to employers and not to principals. Counsel were unable to offer any explanation for this distinction, which is on the face of it rather surprising.
"(1) Anything done by a person in the course of his employment shall be treated for the purposes of this Act as done by his employer as well as by him, whether or not it was done with the employer's knowledge or approval.
(2) Anything done by a person as agent for another person with the authority (whether express or implied, and whether precedent or subsequent) of that other person shall be treated for the purposes of this Act as done by that other person as well as by him.
(3) In proceedings brought under this Act against any person in respect of an act alleged to have been done by an employee of his it shall be a defence for that person to prove that he took such steps as were reasonably practicable to prevent the employee from doing that act, or from doing in the course of his employment acts of that description."
"11. Read literally, subsection (2) might suggest that the principal must authorise the act of discrimination itself before liability arises. But I agree with the EAT in Lana v Positive Action in Training (Housing) Limited  IRLR 501 para 32 (Mr Recorder Langstaff presiding) that this would virtually render the provision a dead letter. In my judgment, Parliament must have intended that the principal will be liable wherever the agent discriminates in the course of carrying out the functions he is authorised to do [emphasis supplied]. It is a moot point whether the common law would in any event impose liability in these circumstances. The scope of the principal's liability for an agent at common law is not entirely clear, although it seems likely that he will be liable for certain tortious acts of the agent, such as misrepresentations, provided they are sufficiently closely related to the agent's actual or apparent authority: see Bowstead and Reynolds on Agency, 19th edition, para 8-182. Whether racial abuse would fall within that principle is problematic, but section 32(2) removes the uncertainty which might otherwise exist.
12. If that analysis is right and the principal can be liable even though he has not authorised the act of discrimination itself, it follows that the act itself may be - and no doubt usually will be - without the principal's knowledge or approval. It is perhaps surprising that the draftsman did not make this plain in sub-section (2) as he did in subsection (1). It might be argued that the omission indicates a conscious decision by Parliament that in the case of a principal he should only be liable if he knows or approves of the discriminatory act itself, but I am not persuaded that this is a legitimate inference to draw from the difference in wording of the two subsections. Indeed, in the Equality Act 2010 section 109(3) expressly states that the principal will be liable irrespective of whether he knew or approved of the act of discrimination."
"Whatever the precise scope of the agency concept in section 32 - and in my view it must at least reflect the essence of the legal concept - Ms Ausher does not fall within it."
At para. 70 of his concurring judgment (p. 643 G-H) Lewison LJ said that the terms "agency" and "authority" must be "interpreted in accordance with ordinary legal parlance". On that basis Ms Ausher could not be said, when doing her work in the butchery department, to have been acting as an agent of the MoD. At para. 41 of his judgment (pp. 637-8) Elias LJ said:
"Ms Ausher's contract with Sodexo is the source of any authority she has to make decisions relating to the butcher's department in the mess. … [There was no] authorisation by the MoD to allow Ms Ausher to act on its behalf with respect to third parties."
And, at para. 44 (p. 638G):
"Ms Ausher may be said in a general sense to be working for the benefit of the MoD, but she is not acting on its behalf. She is not, as it were, standing in the shoes of the MoD in relation to independent third parties."
Bowstead and Reynolds
"(1) Agency is the fiduciary relationship which exists between two persons, one of whom expressly or impliedly manifests assent that the other should act on his behalf so as to affect his relations with third parties, and the other of whom similarly manifests assent so to act or so acts pursuant to the manifestation. …
(2) In respect of the acts to which the principal so assents, the agent is said to have authority to act; and this authority constitutes a power to affect the principal's legal relations with third parties."
The following commentary elaborates the propositions in those rules. Mr Segal referred us to a passage in para. 1-002 which states that "for the purposes of most legal usage" an essential element is that the agent has authority to affect the principal's relations with third parties. He also referred us to the passages to the same effect in paras. 1-003 and 1-004.
"The essential issue is … one of authority; the authority of the shop stewards to take the action complained of on behalf of the union."
He noted, at p. 100, that the issue only concerned liability under the 1971 Act, though he observed that liability for tortious acts might be "a closely connected subject".
"No new development is involved in the law relating to the responsibility of a master or principal for the act of a servant or agent. In each case the test to be applied is the same: was the servant or agent acting on behalf of, and within the scope of the authority conferred by, the master or principal ?"
He noted that normally the authority of a servant – in more modern language, an employee – was wider than that of an agent, but he said that that was not invariably the case and that were cases where an agent is elected to a position which gives him "authority of considerable generality" (pp. 99-100). He then analysed the position of shop stewards under the rules of the TGWU and concluded that the acts in question were within their authority. His summary, at pp. 112-113, reads (so far as relevant):
"In accordance with the policy of devolution followed by the Transport and General Workers' Union, and consistently with its rules and practice, shop stewards of the union have a general implied authority to act in the interests of the members they represent and in particular to defend and improve their rates of pay and working conditions. They may do so by negotiation or by industrial action at the relevant place of work. They are not authorised to do any act outside union rules or policy."
THE UNION'S RULES
THE REASONING OF THE ET AND THE EAT
"If we are wrong about that we must consider whether the agency provisions apply to these two individuals. The case of Kemeh … is helpful in this case and also the extract provided to us by the claimant's representative with respect to agency [this appears to be a reference to Bowstead and Reynolds]. We do find that they were acting as agents for the respondent. They were carrying out work on behalf of the respondent in their dealings with local members, officers, other trade unions and the employers. They had express authority to do so through the rule book and on the basis of credentials provided by the respondent."
"He submitted that Mr Saini and Mr Coxhill (1) were not carrying out activities assigned to them by the Respondent; (2) were not under the control of the Respondent, which could not direct what they did; (3) were not in a fiduciary position; (4) did not have any express or implicit authorisation from Respondent to act as they did. On this last question he submitted that the authority of shop stewards and elected officials was limited: they were not authorised to do any act outside union rules or policy - see Heatons Transport v Transport and General Workers' Union  ICR 308 HL at 405G."
As will appear, most of those points were not pursued before us.
"The words and acts found by the ET to constitute sexual harassment generally took place in the context of meetings. Thus Mr Saini was found to have conducted himself in this way at a meeting with HAL management on 24 February 2014. He attacked, abused and threatened her at a branch meeting so she felt physically unsafe. At pay negotiations in December 2013 and on other occasions he informed HAL negotiators that they were not to contact her about certain issues. He would cut across her, shout her down and accuse her of being 'on the take' at meetings. He called her 'headmistress'. Mr Saini said at a meeting of HAL chairs and convenors that he 'wanted that woman off the airport'. He wrote to HAL informing them that the Claimant was no longer to act on behalf of the members of his branch in any capacity. The findings against Mr Coxhill are less extensive; but they include a specific finding that he used overtly sexual language towards her at a meeting on 11 March 2014."
"52. The ET found that Mr Saini and Mr Coxhill were acting as agents for the Respondent because they were carrying out work on behalf of the Respondent in their dealings with local members, officers, other trade unions and employers. We consider that the ET was entitled to reach this conclusion. It is important to keep in mind that a union is a contractual association of subscribing members; this association authorises its officers to act on its behalf in a variety of ways - conducting branch meetings, representing the union at meetings with other unions and employers, liaising with employed officers and holding internal meetings to prepare for external meetings. Such matters are core union work. It is well within the scope of authority of local officers to speak on the Respondent's behalf at such meetings and to correspond with the employer about matters concerning the manner and scope of negotiations. It is well within the scope of authority of local officers to liaise with employed officers. As Lord Wilberforce observed [in Heatons Transport], an office holder may have to perform a variety of functions in the course of the duties of office; we have no doubt that this applied to the Respondent's office holders at HAL.
53. Contrary to Mr Segal's submission we consider for these reasons that the ET was entitled to find that the branch officers were acting within the scope of their authority as officers of the Respondent when speaking at meetings concerning matters to be negotiated with HAL and when corresponding about such negotiations."
"We do not think this is the place for a detailed consideration of the fiduciary duties of a branch officer; but in principle we see no reason why these should not exist. Take, for example, the extreme case of a branch officer who used his position to take bribes; we see no reason why he should not be accountable to the Respondent as owing a fiduciary duty."
The Union's Case
"A person (A) is appointed by another person (P) to a role/job in which he is inter alia authorised by P to perform certain acts as P's agent so as to affect P's legal relations with certain third parties ("the Authorised Acts"). Does A act as P's agent, with the legal authority of P:
(i) (Claimant's case) whenever A does something in that role/job, regardless if it is one the Authorised Acts – so that P is liable to all persons, not just those third parties, for any act done by A in that role ? or
(ii) (Union's case) only when A does an Authorised Act in respect of one of those third parties?
The second is the correct legal position."
(1) As regards Bowstead and Reynolds, he acknowledged the limitations on the definition in article 1. But he contended that the passages which I have quoted or referred to made it clear that the concepts of agency and authority – or of something been done "on behalf of" a putative principal – necessarily connoted an act done towards third parties.
(2) As regards Kemeh, he relied on the passages from paras. 41 and 44 of Elias LJ's judgment quoted at para. 21 above. He acknowledged that the Court was not there concerned with the particular issue raised by his submission; but the references to "with respect to third parties" and "in relation to independent third parties" were nevertheless significant.
(3) As regards Heatons Transport, he relied on Lord Wilberforce's reference to the authority of the shop stewards being to conduct "negotiation or industrial action", which he submitted correctly focused on their conduct towards a third party, namely the employer.
The Claimant's Case
B. THE CONDUCT OF THE EMPLOYED OFFICIALS
THE CURRENT STATUTORY PROVISIONS
"A person (A) discriminates against another (B) if, because of a protected characteristic, A treats B less favourably than A treats or would treat others."
"A person (A) harasses another (B) if—
(a) A engages in unwanted conduct related to a relevant protected characteristic, and
(b) the conduct has the purpose or effect of—
(i) violating B's dignity, or(ii) creating an intimidating, hostile, degrading, humiliating or offensive environment for B."
One of the protected characteristics is sex: see sub-section (5). I will refer to the consequences specified at (i) and (ii) under (b) as "the proscribed consequences" and to an environment of the kind described at (b) (ii) as a "hostile environment". The key phrase for the purpose of the issues which we have to decide is "related to [sex]" under (a).
"(1) An employer (A) must not, in relation to employment by A, harass a person (B)—
(a) who is an employee of A's;
(b) who has applied to A for employment."
(Despite the "(1)", there are no other sub-sections: this is a result of the legislative history explained below.)
"(1) This section applies to any proceedings relating to a contravention of this Act.
(2) If there are facts from which the court could decide, in the absence of any other explanation, that a person (A) contravened the provision concerned, the court must hold that the contravention occurred.
(3) But subsection (2) does not apply if A shows that A did not contravene the provision.
Those were all cases where the harassment would be "associated" with the complainant's sex but not "caused by" it, in the sense of it forming any part of the actor's motivation. The Commission contended that that type of case was not caught by the formulation in section 4A "on the grounds of sex". Counsel for the Secretary of State (David Pannick QC) argued that it was, if necessary applying a Marleasing approach to construction. Burton J was doubtful about whether that was so, but he held that in any event it was important that the legislation was drafted in a way that put the matter beyond doubt: see paras. 59-63 of his judgment (pp. 1257-8). In the summary of the relevant part of his decision at para. 63 (i) he required section 4A to be "recast so as to eliminate the issue of causation".
"… there is nothing explicit, or even arguably implicit, in any of the Articles requiring a Member State to impose vicarious liability on an employer, or indeed liability for negligent failure to take steps, such as were expressly found by the House of Lords in Pearce not to exist in the present discrimination legislation".
(The reference to Pearce is to the decision of the House of Lords which I consider at para. 88 below.) Her submissions proceeded on the basis that, even if there was no such requirement in the Directive, the Secretary of State himself had accepted that in some circumstances third party liability might be appropriate – see paras. 36 and 37 of the judgment (pp. 1249-50). Her argument was that the language of "on the grounds that" precluded such an outcome, but that the problem could be resolved by "adopting an associative rather than causative approach" which she was already contending for on other grounds. As I read his judgment, Burton J accepted that that was so, and the effect of his decision to require the adoption of "associative" language gave Ms Rose what she was asking for. But that was not in itself the reason for adopting that construction, and in para. 63 of his judgment, where he gives his final decision, he does not expressly refer to the third party liability point (see p. 1258B).
(1) They amended the definition of harassment section 4A of the 1975 Act so as to substitute the "related to" formulation used in the Directive. That formulation was then, as we have seen, carried over into the 2010 Act.
(2) They inserted into section 6, which proscribed discrimination and harassment in employment, a new sub-section (2B) dealing with third party liability. This was in substantially the same terms as section 40 (2)-(4) of the 2010 Act, which I set out at para. 59 below.
"(2) The circumstances in which A is to be treated as harassing B under subsection (1) include those where—
(a) a third party harasses B in the course of B's employment, and
(b) A failed to take such steps as would have been reasonably practicable to prevent the third party from doing so.
(3) Subsection (2) does not apply unless A knows that B has been harassed in the course of B's employment on at least two other occasions by a third party; and it does not matter whether the third party is the same or a different person on each occasion.
(4) A third party is a person other than—
(a) A, or
(b) an employee of A's."
As will be seen, those sub-sections were designed to impose liability on employers who had failed to take reasonable steps to prevent their employees being harassed by third parties.
THE ET's REASONING
Findings of Fact
"Mr Kavanagh had mixed reasons for his decision to move the claimant. It was to remove her from the bullying and harassment. That included an element of harassment related to sex carried out by the elected officials, Mr Saini and Mr Coxhill, as well as more generic bullying."
It then says that his decision was "triggered" by the emergence of a DVD of a television interview which the Claimant had given many years previously in which she appeared to be critical of industrial action being taken by some members, and which was thus potentially embarrassing. However, it continues:
"Other matters were of greater concern. He was aware, of course, of the sexual harassment carried out by Mr Coxhill. He was also aware that the claimant had stated that the reasons for Mr Saini's treatment of her were because she was a woman. He must have understood that the environment she was working in was hostile and intimidating. Those factors played a material part in his decision to transfer the claimant. It was therefore tainted by discrimination."
"We say here for completeness and will confirm in our conclusions that the decision to transfer the claimant itself amounted to unwanted conduct that was related to sex (because of the background of harassment related to sex) and had the effect of violating her dignity and of creating a hostile and intimidating environment. Although Mr Kavanagh was not guilty of any discriminatory motive, it cannot be said that the decision to transfer which was made, against the wishes of the employee, part of which was because of sexual harassment, was itself free of any discrimination. The decision to transfer the claimant was tainted by discrimination. It was also unwanted conduct related to sex which had the effect of violating her dignity."
Directions as to the Law
The Dispositive Reasoning
"The failures by the respondent to protect her, take appropriate steps in investigating and disciplining those responsible and the decision to transfer her without her consent arose from those difficulties she faced because she is a woman. The burden therefore shifts to the respondent to explain."
At para. 104 the Tribunal goes on to find that the Union had not discharged that burden: the details of the reasoning relate to a specific point on which the Union had sought to rely and I need not explain it here. That two-stage approach of course reflects the structure of the burden of proof provisions.
"108. Issue 13: "Are there facts from which the tribunal could properly decide that any such conduct that is established was related to the claimant's sex?", taken together with Issue 14: "If so has the respondent shown that it was not so related?"
It must be clear from what we have said that the conduct was related to sex. We find this to be so not only for the more obvious dropped pen incident but also for Mr Saini's treatment of the claimant. The respondent has not shown that it was not related to her sex.
109. Although we accept that the conduct of those investigating matters and taking other decisions affecting the claimant is less obviously related to sex, we have found that it is so related. The claimant's complaints were clear and unambiguous and the respondent's failure to act appropriately with respect to those matters must therefore also be related to sex. The final decision to transfer the claimant, who was a victim of bullying and harassment which included an element of sex discrimination, was related to sex. If we are wrong about this, as we say above, we find it was an act of sex discrimination rather than conduct which amounts to harassment."
The reasoning in para. 109 is succinct, but I understand the phrase "we have found" to be intended to refer back to the earlier passages which I have set out or summarised.
"It cannot be said that the decision to transfer and the consequent resignation was 'in no way' tainted by unlawful discrimination. It cannot be said that the protected characteristic in question, that of sex, did not influence Mr Kavanagh when he decided to transfer the claimant, as he was under no illusion that there had been sexual harassment of the claimant."
"The claimant's complaints were clear and unambiguous and the respondent's failure to act appropriately with respect to those matters must therefore also be related to sex. The final decision to transfer the claimant, who was a victim of bullying and harassment which included an element of sex discrimination, was related to sex."
The "therefore" which I have italicised is explicit. It is also clear that the same reasoning is implicit in the second sentence; but in any event para. 14.16 explicitly acquits Mr Kavanagh of any "discriminatory motive" but says that the transfer is nevertheless "unwanted conduct that was related to sex (because of the background of harassment related to sex) [emphasis supplied]". The same approach can be seen, though not quite so clearly articulated, in para. 138.
THE REASONING OF THE EAT
"In order to decide whether the treatment of the Claimant by the paid officers was less favourable treatment on the grounds of sex the ET was required in each case to focus upon their mental processes. It was not correct to say that their decisions were because of sex simply on the ground that they were 'tainted' by the conduct of Mr Coxhill and Mr Saini. This seems to have been a key part of the reasoning of the ET: see especially paragraphs 14.15, 14.16 and 102."
"If the ET meant, in paragraph 42 and elsewhere in its Reasons, to find that the paid officers, in the failures to act or the decision to transfer, were not themselves influenced by the protected characteristic of sex, that would seem to indicate that the Respondent discharged any burden of proof on the reason why question. But we are not sure whether this is what the ET meant. There is, as we have seen, a difference between motive and 'reason why'; and it is possible that the ET used the word only on the question of motive. The question of direct discrimination will therefore have to be remitted."
(The reference to para. 42 of the Reasons seems to be a slip, and I have not identified the particular passage which the EAT had in mind. But that does not affect the reasoning.)
(1) At para. 91 it noted that the effect of the ET's reasoning was to impose a liability on an employer for failing to prevent harassment not only by its own employees or agents but also by third parties: even if the lay officials, being agents of the Union and part of its structure, might not naturally be described as "third parties", the ET's reasoning was not specific to people in their position. This played an important part in its subsequent reasoning.
(2) At para. 92 it said that the analysis in CLFIS referred to above must apply to harassment as much as to discrimination. Thus, if a claim lay against the Union for failing to prevent the Claimant's harassment by the lay officials it would in principle lie against the individuals responsible for that inaction – even though she had not in fact chosen in this case to proceed against the employed officials. This too was important to its subsequent reasoning.
"30. The 'unwanted conduct' … can (but not necessarily will) include inaction: but that conduct has to be taken on the grounds of race or ethnic or national origins if it is to create the hostile environment and thereby come within the heading of harassment. Thus, if inaction occurs because, for instance, the relevant person in the employment of the employer is ill, or for instance because the office is so completely inefficient as to fail to deal with something, or for various other reasons which can easily be imagined which have nothing to do in themselves with race or ethnic or national origin, then the inaction, however regrettable it may be, is not on the grounds of race or ethnic or national origin.
31. [The claimant's] argument, as it seems to us, places too much weight upon the nature of the conduct of the third parties. Assuming that third party conduct is to be taken as inherently racist, which must depend on the particular facts of any particular situation, does that mean that a failure to deal with it is itself inherently racist and therefore must be taken to have been itself on the grounds of race? The question nearly answers itself despite [counsel's] persistent submissions, but in any event she too drew back from the conclusion which would inevitably follow from her argument that if, for instance in this case, [the manager] had had a heart attack which hospitalised him immediately after having had the complaint from the Claimant, and that that had been in truth the reason for his not dealing with the complaint, nonetheless he would have to be condemned and his employer with him as having acted in a racially discriminatory manner by subjecting the Claimant to racial harassment. That would be too far, but she acknowledged it was the result of her primary submission. It demonstrates to us that that submission was in error."
It will be noted that Langstaff P in that passage regarded it as unacceptable that a manager should be individually liable for discrimination simply because some omission on his part – whether or not culpable – had led to an employee being subjected to harassment by someone else.
"We have no doubt that the re-cast definition of harassment was intended to encompass cases such as these. We note, however, that these are all cases where the association is between the conduct of the alleged perpetrator and the protected characteristic. They are cases where it is just to impose liability on the perpetrator."
It referred at para. 99 to the Commission's complaints in the EOC case about "third party liability"; but it described the arguments on the point as "tentative" and said that Burton J had reached no definite conclusion. It also referred to the decision of the EAT in Sheffield City Council v Norouzi  UKEAT 049710/1406,  IRLR 897, which had proceeded on the basis that the effect of the EOC decision was that the Directive did indeed require the proscription of third party liability and could be enforced directly against a public-sector employer; but it pointed out that that had been conceded by the employer. (It is convenient to say at this stage that the EAT was right to make that point: see para. 7 of my judgment in Norouzi (p. 899), where we recorded some unease about the concession).
"100. In our judgment section 26 requires the ET to focus upon the conduct of the individual or individuals concerned and ask whether their conduct is associated with the protected characteristic - for example, sex as in this case. It is not enough that an individual has failed to deal with sexual harassment by a third party unless there is something about his own conduct which is related to sex. We reach this conclusion for the following principal reasons.
101. Firstly, this approach seems to us to accord with the natural meaning of the words in the European and domestic legislation. The first task is to identify the conduct (in which, as in Conteh, we would include a settled course of inaction); the next to ask whether that conduct is related to the protected characteristic. It is not sufficient to ask whether some other, prior, conduct by someone else is related to the protected characteristic.
102. Secondly, this approach caters for the kind of case which Langstaff J identified in paragraphs 31 and 32 of Conteh. If inaction is due to illness or incompetence or some real non-discriminatory constraint upon action one would not naturally say that it was 'related to sex'; but if inaction or a cold shoulder is really indicative of silently taking sides with the perpetrator - even without encouraging the perpetrator - one might well say that it was related to sex. The focus will be on the person against whom the allegation of harassment is made and his conduct or inaction; it will only be if his conduct is related to sex that he will be liable under section 26. So long as the ET focuses upon the conduct of the alleged perpetrator himself it will be a matter of fact whether the conduct is related to the protected characteristic.
103. Thirdly, there is, as far as we can see, no other mechanism in any Directive, or in UK domestic law (other than the provisions now repealed in section 40) for distinguishing those cases where liability ought to be imposed in relation to third party harassment and those where it ought not to be. In the EOC case and in Norouzi there was discussion of steps or practices which an employer might be required to undertake in order to prevent or mitigate the effect of third party harassment; but there is no basis - no legal test - for such measures to be found in the primary instruments of legislation.
104. In our judgment the ET did not apply the correct approach. The error is at its clearest in paragraph 4.16 where the ET says that the decision to transfer the Claimant was related to sex 'because of the background of harassment related to sex'. This does not follow: as we have seen, it will depend on an assessment of the conduct of Mr Kavanagh rather than that of the perpetrators. Similarly in paragraph 109 the ET thought that because the complaints were plainly related to sex the inaction of the decision makers must also be related to sex. Again this does not follow."
"There was a lengthy period of inaction following the Claimant's complaints about sexual harassment. The decision to transfer the Claimant was made in the knowledge of the conduct aimed at her and without addressing it. The ET's finding about the motives of the paid officers may point in their favour but it does not directly address the statutory question in the way we have indicated."
THIRD PARTY LIABILITY
Direct discrimination (section 13)
"33. In some cases the ground, or the reason, for the treatment complained of is inherent in the act itself. If an owner of premises puts up a sign saying 'no blacks admitted', race is, necessarily, the ground on which (or the reason why) a black person is excluded. James v Eastleigh [James v Eastleigh Borough Council  2 AC 751] is a case of this kind. There is a superficial complication, in that the rule which was claimed to be unlawful – namely that pensioners were entitled to free entry to the Council's swimming-pools – was not explicitly discriminatory. But it nevertheless necessarily discriminated against men because men and women had different pensionable ages: the rule could entirely accurately have been stated as 'free entry for women at 60 and men at 65'. The Council was therefore applying a criterion which was of its nature discriminatory: it was, as Lord Goff put it (at p. 772 C-D), 'gender based'. In cases of this kind what was going on inside the head of the putative discriminator – whether described as his intention, his motive, his reason or his purpose – will be irrelevant. The 'ground' of his action being inherent in the act itself, no further inquiry is needed. It follows that, as the majority in James v Eastleigh decided, a respondent who has treated a claimant less favourably on the grounds of his or her sex or race cannot escape liability because he had a benign motive.
34. But that is not the only kind of case. In other cases – of which Nagarajan is an example - the act complained of is not in itself discriminatory but is rendered so by a discriminatory motivation, i.e. by the 'mental processes' (whether conscious or unconscious) which led the putative discriminator to do the act. Establishing what those processes were is not always an easy inquiry, but tribunals are trusted to be able to draw appropriate inferences from the conduct of the putative discriminator and the surrounding circumstances (with the assistance where necessary of the burden of proof provisions). …"
"Viewed in the broadest terms, the Burton decision has much to commend it. There is, surely, everything to be said in favour of a conclusion which requires employers to take reasonable steps to protect employees from racial or sexual abuse by third parties. But is a failure to do so 'discrimination' by the employer? Where the Burton decision is, indeed, vulnerable is that it treats an employer's inadvertent failure to take such steps as discrimination even though the failure had nothing to do with the sex or race of the employees. In this crucially important respect the decision gives insufficient heed to the statutory discrimination provisions. An essential element of 'direct' sex discrimination by an employer is that, on the grounds of sex, the employer treats the employee less favourably than he treats or would treat an employee of the opposite sex. Similarly with 'direct' racial discrimination: the 'less favourable treatment' comparison is an essential ingredient of the statutory wrong: see section 1(1)(a) of the Race Relations Act 1976. Unless the employer's conduct satisfies this 'less favourable treatment' test, the employer is not guilty of direct sex or racial discrimination. In making this comparison acts of persons for whose conduct an employer is vicariously responsible are to be attributed to the employer. It is otherwise in respect of acts of third parties for whose conduct the employer is not vicariously liable."
He observed at para. 31 (p. 946H) that "the harassment in Burton was committed by third parties for whose conduct the employer was not vicariously responsible". In those circumstances discrimination within the meaning of the Act could not be established.
(1) I am inclined to doubt whether the change which Burton J required was indeed strictly necessary. It seems to me that his distinction between an "associative" and a "causative" relationship may not be essentially different from that expounded in Amnesty (which had not been so clearly articulated at the time of the EOC case). In, for example, a case of the Brumfitt type (see the first bullet in para. 56), where a speaker uses overtly sexist language, the link with the protected characteristic is in the words themselves and does not depend on his motivation. However, it does not ultimately matter whether I am right about this, since the importance of the EOC case for our purposes lies in the light it sheds on the statutory intention behind the use of the "related to" formulation in the 2010 Act.
(2) Although I have used Burton J's terminology of "associative" and "causative" because of the centrality of the EOC case to the argument, I am not sure that it best describes the distinction he had in mind. It seems to proceed on the basis that a proscribed factor can only "cause" an act of discrimination where it affects the mental processes of the putative discriminator. But in at least one sense any ground of discrimination is "causative", whichever of the two "Amnesty types" it belongs to. Perhaps this only illustrates the wisdom of Lord Nicholls' caution about the use of the language of causation: see para. 83 above.
THE CLAIMANT'S APPEAL
Lord Justice Moylan:
Note 1 The effect of that provision is that logically one should consider the claim of harassment first, but that is not the course taken in ET’s Reasons or the EAT’s judgment; and for clarity I have in this judgment followed the same course as them and taken discrimination first. [Back] Note 2 Elias LJ in Kemeh thought that the point was moot (see para. 12 of his judgment quoted at para. 18 above). I am bound to say that on the orthodox view as summarised in article 90 of Bowstead and Reynolds I would have thought that the statute does effect an extension: if we were in this case concerned with a common law tort the recognised conditions for liability would not be satisfied. But, as we have now been told authoritatively more than once, “the law of vicarious liability is on the move”: see most recently per Lord Reed at para. 1 of his judgment in Cox v Ministry of Justice  UKSC 10  AC 660 (p. 664 D-E).
[Back] Note 3 Though it is in fact qualified, as noted at para. 23 above: indeed at para. 1-004 the authors note that that the aspect of the definition relating to affecting legal relations with third parties might not be apt to “other phenomena of agency reasoning such as its application in tort”.
[Back] Note 4 In Wijesundera v Heathrow 3PL Logistics Ltd  UKEAT 0222/13/0512,  ICR 523, Langstaff P suggested that the effect of the anomaly could be mitigated by (I paraphrase) taking a limited approach to the scope of the authority conferred: see para. 49 of his judgment (pp. 538-9). But we were not referred to Wijesundera and we heard no argument on this possibility. [Back] Note 5 That is a convenient shorthand, which I will adopt in this judgment. I do not think that in this context there is any risk of confusion with its use in other contexts to refer to liability to a third party. It should also be clear that it does not mean direct liability for the wrongful act of a third party but rather liability for failing to protect the employee against such an act. [Back] Note 7 I made this point in para. 16 of my judgment in Richmond Pharmacology v Dhaliwal  UKEAT 045808/1202,  ICR 724, (at p. 730C). (It follows that when at para. 87 of my judgment in Pemberton v Inwood  EWCA Civ 564 I said that the use of “related to” in section 26 “may be a significant difference in some cases” my use of “may” was fortunately appropriate.) [Back] Note 8 Mr Carr also provided, with the post-hearing submissions, the Equality Impact Assessment relating to what became section 65. Although this referred to the possibility that employees might have other redress in cases of third party harassment, the redress specified was (a) the right to claim for constructive dismissal (on the basis that a failure to protect an employer from third party harassment was a breach of the implied duty of trust and confidence); and (b) a claim against the harasser under the Protection from Harassment Act 1997. That points against, rather than towards, the existence of any alternative redress being available under the Act itself. [Back] Note 9 I should record that the Union in its original grounds of appeal contended that it was in fact clear from the ET’s findings that their motivation was not discriminatory and that remittal was unnecessary. Lewison LJ did not give permission as regards this point. But it is clear that the EAT thought that the ET’s findings went quite a long way in the Union’s favour if the correct legal approach had been taken, albeit not quite far enough; and I would agree. [Back]
Note 1 The effect of that provision is that logically one should consider the claim of harassment first, but that is not the course taken in ET’s Reasons or the EAT’s judgment; and for clarity I have in this judgment followed the same course as them and taken discrimination first. [Back]
Note 2 Elias LJ in Kemeh thought that the point was moot (see para. 12 of his judgment quoted at para. 18 above). I am bound to say that on the orthodox view as summarised in article 90 of Bowstead and Reynolds I would have thought that the statute does effect an extension: if we were in this case concerned with a common law tort the recognised conditions for liability would not be satisfied. But, as we have now been told authoritatively more than once, “the law of vicarious liability is on the move”: see most recently per Lord Reed at para. 1 of his judgment in Cox v Ministry of Justice  UKSC 10  AC 660 (p. 664 D-E). [Back]
Note 3 Though it is in fact qualified, as noted at para. 23 above: indeed at para. 1-004 the authors note that that the aspect of the definition relating to affecting legal relations with third parties might not be apt to “other phenomena of agency reasoning such as its application in tort”. [Back]
Note 4 In Wijesundera v Heathrow 3PL Logistics Ltd  UKEAT 0222/13/0512,  ICR 523, Langstaff P suggested that the effect of the anomaly could be mitigated by (I paraphrase) taking a limited approach to the scope of the authority conferred: see para. 49 of his judgment (pp. 538-9). But we were not referred to Wijesundera and we heard no argument on this possibility. [Back]
Note 5 That is a convenient shorthand, which I will adopt in this judgment. I do not think that in this context there is any risk of confusion with its use in other contexts to refer to liability to a third party. It should also be clear that it does not mean direct liability for the wrongful act of a third party but rather liability for failing to protect the employee against such an act. [Back]
Note 7 I made this point in para. 16 of my judgment in Richmond Pharmacology v Dhaliwal  UKEAT 045808/1202,  ICR 724, (at p. 730C). (It follows that when at para. 87 of my judgment in Pemberton v Inwood  EWCA Civ 564 I said that the use of “related to” in section 26 “may be a significant difference in some cases” my use of “may” was fortunately appropriate.) [Back]
Note 8 Mr Carr also provided, with the post-hearing submissions, the Equality Impact Assessment relating to what became section 65. Although this referred to the possibility that employees might have other redress in cases of third party harassment, the redress specified was (a) the right to claim for constructive dismissal (on the basis that a failure to protect an employer from third party harassment was a breach of the implied duty of trust and confidence); and (b) a claim against the harasser under the Protection from Harassment Act 1997. That points against, rather than towards, the existence of any alternative redress being available under the Act itself. [Back]
Note 9 I should record that the Union in its original grounds of appeal contended that it was in fact clear from the ET’s findings that their motivation was not discriminatory and that remittal was unnecessary. Lewison LJ did not give permission as regards this point. But it is clear that the EAT thought that the ET’s findings went quite a long way in the Union’s favour if the correct legal approach had been taken, albeit not quite far enough; and I would agree. [Back]