Employees Not Employers May Have to Pay Compensation for Discrimination

Where an employee has suffered discrimination or harassment at the hands of another employee, which is done in the course of the discriminating employee’s employment, the employer of the discriminating employee will be vicariously liable for his acts, unless the employer can demonstrate that it took all reasonable steps to prevent the him from committing the discriminatory act(s) complained of or any other discriminatory acts of that description.

Claims for discrimination and/or harassment, which include acts committed by an employee, can be brought against the employer and also the employee who committed the discriminatory act. If an employee’s act has led to an employer being found to be in breach of the discrimination legislation, that employee could also be found to be personally liable for the discriminatory acts if he “knowingly aided” the unlawful act. For acts of discrimination after 1 October 2010 (when the Equality Act 2010 came into force), it does not matter whether the employee knew he was aiding the unlawful act, unless that employee committed a discriminatory act but reasonably relied on a statement by their employer that it did not contravene the Equality Act 2010.

Where both the employee and employer are found to be liable, the tribunals have sometimes, in the past, apportioned any compensation payable between them, quite often with the bulk of the liability being apportioned to the employer, on the basis that it is more likely to be able to pay. Unlike in unfair dismissal claims, there is no cap on the level of compensation that can be awarded for discrimination claims.

However, the Employment Appeal Tribunal has now confirmed that tribunals do not have the power to apportion awards of compensation and generally should not do so unless there is clear evidence that distinguishes the damage caused by each of the discriminators, in which case each discriminator will only be held liable for that part of the damage which is attributable to each of them. There is also nothing to preclude the discriminators apportioning any compensation between themselves.

Therefore, an employee who succeeds in a claim for discrimination and/or harassment, and is awarded compensation for which two or more parties are held to be jointly and severally liable, will be able to enforce the whole of the award against any one of the discriminators, for example the employer. A disgruntled employer may seek to recover all or part of the compensation from any employees for whom it is vicariously liable. Alternatively, where the employer does not pay or is insolvent, meaning the award cannot be enforced against it, a claimant could pursue the other employee who was jointly liable with the employer.

This case will provide an incentive for claimants to join in employees as respondents to a discrimination claim to apply more pressure to settle, as the prospect of potentially being liable for the whole award of compensation would be a frightening thought for any employee.