Sexual harassment outside work: when will an employer be liable?

Last month, the Employment Appeal Tribunal handed down a judgement in AB v Grafters Group Ltd (t/a CSI Catering Services International), a case that serves as a reminder for employers about the scope of their liability for sexual harassment claims made against their employees, even when incidents occur outside the workplace.

Vicarious liability

Section 109 of the Equality Act 2010 imposes vicarious liability on employers, making them responsible for acts of discrimination, harassment, and victimisation committed by their employees acting “in the course of employment”.

What was the case about?

AB worked as a hospitality agency worker for Grafters Group, a provider of hospitality services. On the day of the incident, AB mistakenly believed she was due to work at Hereford Racecourse and went to her employer's office where she thought transport had been arranged for her. Instead, she was given a lift by CD, a fellow worker, who later told her she was not required to work that day. Despite AB's request to be taken home, CD drove her to a golf course and subjected her to sexual harassment, including unwanted touching, showing her a pornographic video, and inappropriate comments.

Although the Employment Tribunal found that harassment had occurred, it held the employer was not vicariously liable because CD was not acting "in the course of employment" at the time. It noted that the incident occurred outside of working hours and place of work, CB was not scheduled to work, and the lift was neither arranged nor known about by the employer. It concluded CD's motive in offering the lift was not linked to his employment.

AB appealed this decision to the Employment Appeal Tribunal (EAT) on three grounds:

• The Tribunal had failed to consider relevant factors: including that CD had sent AB harassing texts earlier in the day when he was at work and the fact that CD had previously driven AB to a job.
• The Tribunal had regard to irrelevant factors: such as unnecessarily analysing CD's motive.
• The Tribunal failed to have regard to whether what happened between CD and AB occurred in circumstances that were an "extension of their employment".

When will conduct be "in the course of employment"?

In its decision, the EAT set down a number of principles for assessing when an act will be "in the course of employment", including:

1. Employers are responsible for anything an employee does "in the course of their employment".
2. It is the person accused of harassment who must be acting in the course of their employment, not the victim.
3. The term “course of employment” should be given its normal, everyday meaning and not a legal technical meaning.
4. The definition should be interpreted broadly.
5. Each case depends on its specific facts, with the result that different decisions may be made in circumstances which appear similar.
6. Tribunals must look at all the circumstances to decide if it was work-related. Key factors include where and when the act happened.
7. Even if discrimination or harassment occurs outside of the workplace or working hours, it might still count if there is a sufficient “nexus or connection with work”. Tribunals need to consider whether the circumstances are such to make the situation an “extension of work and the workplace”.
8. It does not matter if the employer knew or approved of what happened.

Employment Appeal Tribunal findings

Taking these into account, on appeal, the EAT overturned the Tribunal’s decision, finding it had failed to apply the correct legal test. Specifically, the Tribunal did not assess whether there was a "sufficient nexus or connection with work such as to render it in the course of employment".

The appeal Judge referred to established case law, including Chief Constable of Lincolnshire Police v Stubbs, confirming that informal settings - such as car journeys or social events - can fall within the scope of the “course of employment” if there is a close enough connection to work.

The Judge concluded that the Tribunal should have examined the events leading up to the harassment, including CD's texts to AB while working, and whether they formed part of a pattern leading up to the incident. The Tribunal also needed to consider how closely CD’s role was connected to why AB was in his car at the time, especially given he had previously given her a lift to work.

While the Tribunal had correctly concluded that AB's belief that she was acting in the course of her employment was not relevant, it was important to consider if CD exploited this belief to persuade her to accept the lift. If so, this could mean the lift was sufficiently connected to work to classify as “in the course of employment.” As the Tribunal did not properly analyse these points, the appeal was upheld on all grounds.

The case was remitted to the original Tribunal for further consideration.

Practical takeaways for employers

This decision is a cautionary tale for employers. Liability for harassment is not confined to the office or the factory floor. Employers can be held responsible for acts that occur: 

• During work-related travel (even if outside normal hours).
• At social events or informal gatherings linked to work.

The motives of the harasser or whether the employer approved the conduct are irrelevant. The key question is whether the conduct is sufficiently connected to employment.

Practical steps which may help employer reduce the risk include:

• Maintain clear policies and training which define unacceptable behaviour and cover both work and social settings.
• Be aware of informal work-related activities (including WhatsApp groups, social events and lift shares) and set expectations for behaviour in these contexts.
• Encourage reporting of inappropriate behaviour and investigate complaints even if they occur off-site or out of hours.
• Especially in light of the preventative duty on sexual harassment, proactively assess the risks of employees acting in a way which creates liability outside of normal work settings, such as social events.