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Under section 109(1) of the Equality Act 2010 (EA 2010), an employer is liable for acts of discrimination, harassment, and victimisation carried out by its employees in the course of employment: “[a]nything done by a person (A) in the course of A’s employment must be treated as also done by the employer.” Section 109 further states that “[i]t does not matter whether that thing is done with the employer’s … knowledge or approval.” However, under section 109(4) EA 2010, an employer has a defence if it can demonstrate that it “took all reasonable steps” to prevent the employee from carrying out the act of discrimination. When considering an employer’s defence that it took all reasonable steps to prevent an employee from discriminating against another employee, a tribunal will examine how effective the steps were likely to be when they were taken and how effective they proved to be in practice. The decision of Allay (UK) Ltd v Mr S Gehlen looks at the scope of this defence.

Facts of the Case

Gehlen is of Indian origin and began working for Allay (UK) Ltd in October 2016. In August 2017, Gehlen complained to a manager that another employee, Pearson, had “regularly” made racist remarks towards him throughout his employment. The manager told Gehlen to “report the matter to HR,” but he did not take any further action. It was also the case that two other employees (one of whom was a manager) had heard some of the racist remarks firsthand, yet also failed to report the matter to HR.

Gehlen was dismissed on the ground of performance in September 2017, after which he raised a formal complaint in regards to the harassment he had experienced during his employment. An investigation was undertaken and Allay concluded that Pearson had made the racist remarks in question. It is not clear from the record as to whether Pearson was disciplined, but he did undergo equality and diversity training.

The Employment Tribunal

Gehlen brought claims of direct race discrimination and harassment related to race in the Employment Tribunal (ET). Allay sought to rely on the “all reasonable steps” defence, based on the fact that it had equal opportunities and anti-bullying and harassment policies in place, and that it had trained staff, including Pearson, on these areas in 2015, approximately 20 months before Gehlen started to work for Allay. According to the ET, the training had included one slide on harassment and had “made plain to the employees what they should do if they heard unacceptable remarks and they all failed to follow that guidance.”

The ET upheld the latter claim of harassment related to race only and, in doing so, rejected Allay’s defence under section 109(4) EA 2010, concluding that the company had not taken “all reasonable steps” to avoid discrimination in the workplace. The ET determined that this had been shown by the fact that the remarks had been made in the first place and by the fact that both managers and the other employee had failed to react appropriately after having received anti-harassment training—evidence that the training that Allay had provided was no longer effective. The ET stated that it was clear that the training of 2015 had become “stale” and that “a reasonable step would have been to refresh that training.”

Allay appealed to the Employment Appeal Tribunal (EAT) on the ground that “[i]t was unlawful/perverse for the [ET] to fail to properly engage with the statutory defence at section 109(4), Equality Act (2010),” arguing that the statutory defence only required reasonable steps to be taken, and the effectiveness of those steps was not relevant.

The Employment Appeal Tribunal

The Employment Appeal Tribunal (EAT) held that the ET “did not err in its approach to the law or reach a determination that came close to being perverse.” While the ET could “have made more detailed findings,” the EAT found that it was “entitled to conclude the training was stale and was no longer effective to prevent harassment”. The EAT therefore concluded that Allay could not rely on the defence under section 109(4) EA 2010. In upholding the ET’s decision, the EAT offered some useful guidance on how the “all reasonable steps” defence should work in practice.

The EAT stated that ETs should begin by looking at the steps that were already taken and assess how effective those steps were likely to be at the time they were taken. It was here that the EAT noted that the ET should have made more detailed findings about the effectiveness of Allay’s policies and 2015 training. Despite finding obvious flaws in the policies and training, the ET had accepted them as adequate and instead focused on the effectiveness of the training over time. Ultimately, this analysis did not undermine the ET’s reasoning; however, in the future it is likely that ETs will scrutinise the content of employers’ policies and trainings in order to determine their quality and effectiveness.

The EAT next considered whether it would have been reasonable for the employer to have taken “further steps,” advising that ETs should take into account when existing steps cease to be effective and “the cost or practicality of taking [further] steps.” The EAT stated that ETs should also consider the “likely effectiveness” of any additional steps, noting that it may still be reasonable to take such steps, even if they might not prevent the discriminatory behaviour.

The EAT stated that the length and depth of the training are important factors, as “[b]rief and superficial training is unlikely to have a substantial effect in preventing harassment” and also “unlikely to have long-lasting consequences.” The EAT noted that “[t]horough and forcefully presented training is more likely to be effective, and to last longer.”

When determining whether training should be refreshed, the EAT found that if it becomes apparent to an employer that harassment is still occurring after anti-harassment training has been provided, and/or staff did not understand the training, the employer may be on notice to improve and refresh the training. However, the EAT stated that “[i]f the training was of a good standard and the employer was unaware of the continuing harassment,” the reasonable steps defence may still proceed.

In the case of Allay (UK) Ltd v Mr S Gehlen, the evidence of the racist remarks and the managers’ failures was sufficient for the ET to conclude that the 2015 training was no longer effective. The EAT deemed Allay to have had sufficient knowledge that the harassment was happening via the two managers—a fact, the EAT found, that should have alerted Allay to the need for more training.

Points to Note

Employers may want to ensure that their equality, diversity, and whistleblowing policies are of a high quality and updated regularly. Employers may also want to confirm that policies are reviewed and signposted to employees on a yearly basis and that training is sufficient and up to date. In addition, employers may want to provide training at any point during employment when it becomes clear that previous training has ceased to be effective (e.g., following an incident of harassment).

Daniella McGuigan is a partner in the London office of Ogletree Deakins.

Carrie-Ann Hopkins is a paralegal in the London office of Ogletree Deakins.



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