Few could have missed the spate of high-profile cases involving sex discrimination, bullying and harassment brought against UK and US financial institutions and law firms in recent months. The compensations firms have been forced to pay – particularly Morgan Stanley’s £29m payout in the US class action brought by its female employees – must have reminded many HR professionals of the urgent steps they need to take to avoid such claims.
Since employers have been landed with the burden of proving that any less favourable treatment is not due to sex discrimination, it is important to understand what constitutes sexual harassment and bullying in the eyes of the law. It is also crucial to put in place systems to deal with such complaints, as these will earn an employer points if a case ends up in court.
Q What behaviour constitutes sexual harassment or bullying?
A Harassment is a form of direct discrimination. It can be characterised as unwanted conduct which has the purpose or effect of violating the dignity of a person, and of creating an intimidating, hostile, degrading, humiliating or offensive environment.
Bullying overlaps to some extent, and is usually identified as intimidating, hostile or humiliating treatment by one or more individuals.
The actual behaviour can either involve a campaign of intimidation, sexual advances, threats or demeaning treatment, or an isolated act.
If it occurs outside the workplace – such as at a work function, or during an after-work drink – an employer is still likely to be held responsible for the behaviour.
Q What should HR managers do to avoid claims?
A Encourage a work culture that does not tolerate harassment or bullying.
A practical step would be to establish a formal anti-harassment policy, perhaps including a mechanism for complaints. Regular training to alert staff to harassment and encourage them to report any incidents of bullying or harassment is crucial.
Occasionally, harassment can arise from situations where those responsible believe they are just having a ‘joke’. Managers must ensure such situations do not develop.
Q What should you do on receipt of a complaint?
A Provide initial support for the victim. If they need time off work to recover, you should be accommodating. Staff may be reluctant to make a formal complaint. You should encourage them to do so, reassuring them that the company takes the issue seriously and will not tolerate such behaviour.
If there is no special procedure for dealing with harassment; use the disciplinary and grievance procedure. The investigation should be thorough, and care should be taken to keep the allegations confidential.
Put stringent measures in place to protect the victim, and consider suspending those responsible pending the investigation outcome. It may also be necessary to offer counselling to the victim.
Since harassment frequently takes place in private, there may not be any witnesses. If there are, they should be interviewed, as should the victim and alleged perpetrator(s).
If harassment is found to have taken place, disciplinary proceedings should be brought against those responsible. Any disciplinary sanction should take the seriousness, duration and effect on the employee into account. Repeated or serious incidents of bullying and harassment can justify immediate termination.
Where the complaint involves individuals who work closely with the victim, consider their working conditions. Normally, the perpetrator should be moved away to avoid allegations that the victim has suffered a further detriment.
Q What compensation can be awarded, and is it capped?
A A significant element of an award for discrimination or harassment is for lost earnings.
Compensation for injury to feelings is an additional part of an award. The courts have decided that awards should fall into three bands. The top band is reserved for the most serious cases, such as a lengthy campaign of discriminatory harassment, and is between £15,000 and £25,000 (in these cases there may also be personal injury claims arising from any physical or psychological damage suffered). The middle band is between £5,000 and £15,000, and the lowest is for awards made in the region of £500 to £5,000, where the treatment is considered less serious.
While individual awards of £1m plus are still rare, the overall cost of settling or defending discrimination actions is high. Settlements are likely to rise, given the trend towards increasing numbers of claims being brought by senior-level employees, with potentially significant amounts of lost earnings.