www.newlawjournal.co.uk | 13 September 2013 9legal updateemployment

Appealing optionsChris Bryden & michael Salter revisit old ground: naming respondents in discrimination claims

The scope and the liability of respondents in discrimination claims continues to present the Employment Appeal Tribunal

(EAT) with appeals. In previous articles we have outlined the lack of power by tribunals to order contributions between parties (162 NLJ 7519, p 821) and tactical considerations that may need to be borne in mind by advisers (162, NLJ 7524, p 982).

JurisdictionOn 7 June 2013 the EAT addressed the issue of parties to discrimination claims again in the appeal of Hurst v Kelly UKEAT/0167/13/DM, [2013] All ER (D) 15 (Aug). The facts of this case are quite simple: both appellant and respondent were employees of PH Jones Ltd (PHJ). The employment of Ms Hurst (the appellant/claimant) with PHJ ended and she signed a compromise agreement precluding her presenting any claims against PHJ arising out of her employment or termination. Ms Hurst then presented a claim form to the Bedford Employment Tribunal (ET) alleging sexual harassment by Mr Kelly, her line manager.

At a final hearing (which Mr Kelly did not attend) the ET struck out the claimant’s claim on the grounds they did not have any jurisdiction to hear the complaint: there being no complaint against the employer. This, the EAT found, was wrong in light of Barlow v Stone [2012] IRLR 899, [2012] All ER (D) 237 (Jun) (to which the ET were not referred) and also in light of s 41 of the Sex Discrimination Act 1975 which makes an employer vicariously liable for the acts of employees vis-à-vis a fellow employee bringing a complaint; and s 42(2) which renders the tortfeasor employee liable as an aider and abetter even if the employer succeeds in mounting the “employer’s defence”.

A similar situation had arisen in Barlow, where a claim of harassment under the Disability Discrimination Act 1995 had been brought by Mr Barlow against a fellow employee but not the common employer. The EAT found there was “no warrant in the wording of the 1995 Act for holding that [a claim against an employer] is essential to bring such a claim”.

While both the 1975 and 1995 Acts have now been replaced by the Equality Act 2010, similarly worded sections are found at 109 and 112.

What’s the alternative?Where then does this leave an adviser faced with a client alleging they have been the

victim of discrimination; who should they name as a respondent? It appears there are three alternative scenarios.

take one...The first is to present a claim against the employer alone. An employer is more likely to have the money to satisfy any judgment and, in situations covered by Brennan and others v Sunderland City Council UKEAT/0286/11/SM, [2012] All ER (D) 275 (May) no order for contribution can be made by an ET so it is likely that a successful claimant would in any event seek to enforce against the employer alone.

The risk with such an approach is that when the employer’s ET3 is entered it may well contain the employer’s defence, which, if successfully deployed, would exonerate the employer from liability in circumstances where a fresh claim against the wrongdoing employee would be out of time. There is also the potential risk of corporate insolvency which may delay if not frustrate a claim.

It is not only the claimant who may be affected by their early choice of respondent: it has been held under the Employment Tribunals (Constitution & Rules of Procedure) Regulations 2004 (SI 2004/1861) that the tribunal cannot on the application of the respondent-employer order the addition as a respondent of the wrongdoing employee under r 10(2)(k): this only permits the addition of respondents where they “may be liable for the remedy claimed” and in such a case the claimant is not seeking a remedy from the employee (Beresford v Sovereign House Estates Limited UKEAT/0405/11, [2012] All ER (D) 159 (Jan)). In the same case the EAT (Mr Justice Underhill) stated that the power of r 10(2)(r) which permits the joinder of any person who “has an interest in the outcome of proceedings” did not cover the addition of a respondent who did not wish to be party to the litigation. Where, since Sivanandan v London Borough of Hackney [2011] IRLR 740 and Brennan the addition of such a second respondent would afford the respondent employer no advantage they could not seek a contribution from the second respondent.

In Welsh v Bendel and Cape UKEATS/0014/12/BI, [2013] All ER (D) 86 (Feb) Mr Justice Langstaff voiced his concerns over this interpretation of r 10(2)(r) in Beresford but noted that: “in a case in which the claimant has sued an employer for wrongdoing against her or him by a fellow employee, then if the claim should be successful the employer may have a right of recourse against that fellow employee in the civil courts which goes beyond the right under statute to claim contribution in proceedings which are already on foot. There is powerful authority for that, in Lister

IN BRIEF f Who should be named as respondents

when clients allege they have been the victim of discrimination? The employer, the employee, or both?

13 September 2013 | www.newlawjournal.co.uk10 legal update employment

v Romford Ice & Cold Storage [1957] AC 55…It is to the effect that in some circumstances (the case itself concerned a road traffic incident) an employee may be liable under his contract of employment or in tort to his employer for having done wrong to someone who had a right of recourse against the employer….”

Accordingly, the discriminating employee may find themselves the defendant in litigation for breach of contract or tort brought by the claimant-employer.

Under the 2013 Regulations the tribunal’s power to add parties has changed. Rule 34 states: “The Tribunal may, of its own initiative, or on the application of a party or any other person wishing to become a party, add any person as a party, by way of substitution or otherwise, if it appears that there are issues between that person and any of the existing parties falling within the jurisdiction of the Tribunal which it is in the interests of justice to have determined in the proceedings and may remove any party apparently wrongly included.”

The wording of r 34 is different from those provisions of r 10(2) considered above. However Brennan will remain good law unless and until the EAT or a higher court determines that its principles do not apply in similar fashion to the power under

the new r 34. In the circumstances it is likely to be the exceptional case, if any, in which r 34 can be deployed to circumvent the circumstances considered above.

take two...The second option would be to go down the Barlow/Hurst route and present a claim against the employee only. The problem here would be that many employees will not have the capital available to satisfy what could be a substantial judgment debt. Rule 34 would not seem to change the tribunal’s power to add the employer as a respondent: as there are no “issues between” the employer and the claimant-employee otherwise, one hypothesises, the claimant would have named the employer as a respondent. Equally, there would not appear to be any “issues between” the employer and the respondent-employee.

...and threeThe third, and probably safest, option would be to present a claim against both the employer and employee. This way, this risk posed by the first option where the employer runs the statutory defence is minimised, and the respondent with the deepest pockets can be proceeded against. Further, if the employer is not intending

to run the statutory defence then at any preliminary hearing the respondents can, if they so wish, seek to have the wrongdoing employee removed as a respondent. In such circumstances it will then be in the interests of the employer-respondent to call the wrongdoing employee as a witness in order to ensure their defence is put forward fully.

This third option avoids the potential pitfalls of being put to an election at an early stage without knowing whether the employer will run the employer’s defence and whether its grounds are likely to succeed, and is unlikely to have a significant downside. While the tribunals do appear, anecdotally, to be more willing in the current environment to make costs awards against vexatious or unreasonable claimants, it is difficult to see how a discrimination claim pleaded against both the employer and the employee-wrongdoer could be categorised in such manner. The safest option should be the default option unless there is good reason to proceed on another basis. NLJ

Chris Bryden, 4 King’s Bench Walk (www.4kbw.co.uk; www.chrisbryden.co.uk; @brydenlaw) michael Salter, Ely Place Chambers (www.elyplace.com; www.michaelsalter.net; @michaelelyplace)

2013

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