That’s the price of love

Office romances are increasingly commonplace in the UK. However, not all have happy endings, as illustrated by the recent tribunal claims brought by secretary Faria Alam against the Football Association (FA) following her resignation from the FA.

This came about after details of her alleged relationships with the England coach, Sven Goran Ericsson and the chief executive of the FA, Mark Palios, became public. Office relationships are fine when going well, but, as events at the FA have shown, when a relationship ends or gets out of control, tribunal claims can follow.

The costs to the employer are potentially considerable. These include disruption to the business, conflicts of interest, potential for “pillow talk” and divulgence of confidential business information. There may also be claims of favouritism where one of the parties is in a position of authority, loss of working hours resolving complaints and, not least, the impact on morale and the working environment. Then there are the legal claims. The FA had to defend claims of constructive dismissal, breach of contract, equal pay and sex discrimination.

Sexual harassment
When relationships become non-consensual then claims for sexual harassment can arise. These types of claim naturally concern employers the most, which is not surprising considering the unlimited damages payable and the negative publicity.

Sexual harassment is a recognised form of direct sex discrimination under the Sex Discrimination Act 1975. There was no separate cause of action for sexual harassment under UK law until the Employment Equality (Sex Discrimination) Regulations 2005 came into force on 1 October this year.

The Regulations implement the EC Equal Treatment Amendment Directive and may make it easier for employees to bring successful claims. They expressly prohibit harassment on two grounds:

  • on the grounds of sex where a person engages in unwanted conduct on the grounds of that person’s sex; and/or
  • of a sexual nature where a person engages in any form of unwanted verbal, non-verbal or physical conduct of a sexual nature that has the purpose or effect of violating that person’s dignity, or creating an intimidating, hostile, degrading, humiliating or offensive environment for that person.

In most cases of harassment at work, the harassment is by one employee against another rather than by the employer. Employers can, however, be held vicariously liable for such conduct if it was “in the course of the employment”, even if this occurred without their knowledge or approval. “In the course of employment” can extend to social work-related functions outside the workplace.

Employers can also be potentially vicariously liable under the Protection From Harassment Act 1997, as shown by the Court of Appeal case of Banks v Ablex Limited [2005] IRLR 357, in June this year. The Act, which was introduced to make stalking a criminal offence, makes it illegal for a person to pursue a course of conduct which amounts to harassment of another. Not only can criminal proceedings be brought against the employee, but civil proceedings can be brought against the employer for breach of the statutory tort of harassment.

Employers have a potential defence to a claim for sex discrimination if they can show that they took reasonable steps to prevent harassment from occurring, for example, by introducing an equal opportunities policy. Some employers have, however, gone one step further requiring employees to sign “love contracts”.

Love contracts are (not surprisingly) a US creation to protect employers against sexual harassment claims. They can take many forms but are essentially an agreement between the employee and the employer regulating the employee’s social behaviour and conduct at work. This can be set down in a contract of employment, staff handbook or code of conduct.

Some contracts require employees to inform their employer of relationships formed at work and to confirm their consensual nature. Others require employees to inform the employer of any work relationships formed by colleagues. Other contracts go further still, banning relationships in the same department, office or indeed the company, making non-compliance a dismissible offence.

Love contracts are increasing in the United States. They are also on the increase here as US employers expand into Europe, making these policies global.

Love contracts in Europe
Thomson, the Travel Agents, was one of the first employers to implement a “sex in the workplace” code for their employees. Under the code, employees are requested to inform the company if they enter into a relationship that could lead to a conflict of interest.

In March this year, Boeing allegedly dismissed its chief executive, Harry Stone-Cipher, for having a relationship with a colleague contrary to its strict rules.

The TUC has voiced its concerns about these contracts. It believes that these contracts abuse employees’ right to respect for their private life under the Human Rights Act 1998 and is concerned that employees could face dismissal if they if they refuse to agree to these.

The legality of love contracts has not, as yet, been tested in the UK courts. However, in June this year, a German Court found against the German subsidiary of US giant Wal-Mart and struck out sections of the company’s employee code of conduct. The code barred “any kind of communication that could be interpreted as sexual”, making this a dismissible offence.

Not only were affairs with superiors barred, but the code required employees to inform on their fellow employees if they believed they were breaking the rules.

Employee relationships can prove costly to the employer, but is the answer to impose contracts whereby employees can be dismissed for forming relationships with other employees? The cited benefits of love contracts are that they protect both employers and employees.

Whatever the rationale, there are practical issues of how these contracts would work in the UK. What happens if employees refuse to co-operate? How are they monitored or enforced? How do they affect the working environment? Do they create a “big brother” atmosphere? Clearly these issues need to be thought through and a cost/benefit analysis exercise undertaken before love contracts are introduced. If not, they could result in the very claims the employer is trying to prevent in the first place.

It is a cultural question and the answer, in keeping with UK culture, is probably to steer a middle path. Employers must put in place codes of conduct, equal opportunity policies and anti-harassment policies, setting out the appropriate standards of behaviour at work. While such codes and policies need not go as far as prohibiting relationships at work, they must go further than mere “window dressing”. Employers must ensure that they are robustly implemented and enforced.

There should be regular workshops and training for employees and managers on what the policies mean and how they work. Managers have to be made responsible and accountable for their actions and those of their subordinates, particularly in the light of the potential liability for employers under the Protection from Harassment Act, but the imposition of love contracts may not be the best way of achieving that goal.

Paul Callegari is head of employment and Jackie Cuneen is an associate at law firm Kirkpatrick & Lockhart Nicholson Graham

What is a love contract?

This is an agreement between the employee and the employer designed to regulate the employee’s social behaviour and conduct at work. It is set out in one of the following formats:

  • Contract of employment
  • Staff handbook
  • Code of conduct

Love contracts require employees to tell their employer about the following:

  • Any relationships they form at work
  • Confirmation that such a relationship is consensual
  • Any relationships formed by colleagues

Some contracts also ban relationships in the same department, office or company

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