Untangling the web of liability: employers, agents and the boundaries of workplace harassment

July 23, 2024

Under the well-established legal principle of vicarious liability, the actions of an agent carried out with a principal's authorisation are legally attributed to the principal themselves. The principals could be liable regardless of whether they were aware or consented to the specific act. Employees are considered agents of the employer for this purpose. Vicarious liability therefore extends to employers at common law, holding them accountable for the torts committed by their employees in the course of their employment.

Anderson v. CAE Crewing Services Ltd

In the recent case of Anderson v. CAE Crewing Services Ltd (2024), the Employment Appeal Tribunal (EAT) considered the test to be applied when deciding whether an aviation medical examiner was an agent of the employer for discrimination law purposes.

CAE required crew members to have a "fit to fly" certificate" (FTFC) issued after a medical assessment by an aviation medical examiner (AME). Ms Anderson suffered from bipolar disorder and a heart condition. She was referred for examination by Dr Watts, who decided that he did not have sufficient qualifications to assess her bipolar disorder and recommended an appointment with a psychiatrist. Ms Anderson then arranged a separate assessment by herself with Dr Rowley (an AME), who agreed to issue the FTFC. As CAE was faced with conflicting medical opinions, they referred Ms Anderson to a third AME, Dr King. Dr King also recommended psychiatric evaluation. Ms Anderson subsequently claimed disability discrimination against CAE, arguing that although Dr Watts and Dr King were not CAE employees, they acted as the company's agents under the Equality Act 2010 (EA 2010).

The Employment Tribunal (ET) rejected her claim, deciding that Dr Watts and Dr King were independent contractors. Ms Anderson appealed.

The EAT upheld the appeal and remitted the case for a new hearing. It found that the ET incorrectly conflated the concepts of vicarious liability and agency in its analysis of whether Dr Watts and Dr King were agents of CAE. The EAT clarified that the correct question under EA 2010 is whether the doctors acted as CAE's agents with CAE's authority, not whether their actions were akin to those of employees or carried out with CAE's knowledge or approval.

The EAT noted that agency in a commercial context often involves independent contractors and that being such does not preclude the contractors from acting as agents. The key question is whether the doctors were acting on behalf of the airline with authority from the airline, rather than providing an independent service for which the airline simply paid. This determination depends on the specifics of the relationship and the relevant statutory or regulatory framework, potentially considering whether the doctors functioned as company doctors or independent experts.This case presents an interesting point regarding the scope of agency under discrimination laws. However, the law of agency and vicarious liability has wider consequences than discrimination law. Employers could be liable for the improper actions or illegal behaviour of an employee, or someone performing a similar role to an employee. Consequently, an employer might be held accountable for the carelessness or legal violations of its employees, workers or even contractors, especially when these actions cause harm.

Harassment

Employers could also be liable for harassment by their employees, including acts of sexual harassment carried out without the employer's knowledge. From October 2024, under the Worker Protection (Amendment of Equality Act 2010) Act 2023, employers will have a new mandatory obligation to "take reasonable steps" to protect their employees from sexual harassment.

The obligation to take reasonable steps differs from the existing principle of reasonable steps defence, which applies when the employer can show that it took "all reasonable steps" to prevent a specific act of discrimination from occurring. In practice, the bar for using this defence is high and rarely successful. The new obligation is intended to be proactive and its aim is to prevent acts of sex discrimination from happening in the first place. Time will show if this new obligation will be extended to prevent sexual harassment by third parties.

Recommendations

Employers can take various measures to reduce the risks associated with vicarious liability for the acts or omissions of their employees. Considering the wide range of potential misconduct by those employed or contracted, a comprehensive strategy is recommended.

Implementing appropriate workplace policies and conducting training can effectively lower risks of breach and vicarious liability in the wide range of sectors, such as data protection, health and safety, discrimination or harassment. Educating staff and management about what constitutes negligence or illegal behaviours can help reduce the number of incidents