Introduction

Unite the Union v. Nailard ([2018] EWCA Civ 1203) is a pivotal case adjudicated by the England and Wales Court of Appeal (Civil Division) on May 24, 2018. The case centers around harassment and sex discrimination allegations brought by the Claimant, an employee of the Appellant trade union, against her union. The crux of the matter lies in determining the extent of the union's liability for the discriminatory conduct of its lay officials under the Equality Act 2010, specifically addressing whether such officials are considered employees or agents of the union.

Summary of the Judgment

The Employment Tribunal (ET) initially found that the union was liable for harassment and sex discrimination committed by two lay officials, Mr. Saini and Mr. Coxhill, towards the Claimant. The ET further upheld claims of unfair and discriminatory dismissal following the Claimant's resignation, deemed a constructive dismissal. Upon appeal, the Employment Appeal Tribunal (EAT) partially upheld the ET's findings, concluding that the lay officials were not employees but agents of the union, thereby maintaining the union's liability under section 109(2) of the Equality Act 2010. However, the EAT overturned the ET's findings regarding unauthorized harassment by employed officials and remitted those aspects for re-hearing.

The Court of Appeal, presided over by Lord Justice Moylan and supported by Lord Justice Earl and Lord Justice Norris, affirmed the EAT's decision concerning the liability of the union for the actions of its agents. The Court emphasized that under section 109(2) of the Equality Act 2010, employers (or principals) are liable for acts committed by their agents within the scope of their authority, regardless of the principal's knowledge or approval. The judgment also clarified that the union could not limit its liability based on the nature of the interactions between its officials and the Claimant, thereby reinforcing the broad scope of vicarious liability under the Act.

Analysis

Precedents Cited

The judgment extensively referenced several key cases to underpin its reasoning:

• Kemeh v Ministry of Defence ([2014] EWCA Civ 91): Established that principals are liable for discriminatory acts of agents acting within their authority, irrespective of the principal's awareness.
• Heatons Transport (St Helens) Ltd v Transport and General Workers' Union ([1973] AC 15): Affirmed the liability of unions for the actions of shop stewards when acting within the scope of their authority.
• Dadourian v Rouge (London) Limited ([2018] EWCA Civ 129): Explored vicarious liability for discrimination within the context of agency relationships.
• Pearce v Governing Body of Mayfield School ([2003] UKHL 34): Disapproved of earlier precedent (Burton v De Vere Hotels Ltd) regarding employer liability for third-party discrimination.
• CLFIS (UK) Ltd v Reynolds ([2015] EWCA Civ 439): Highlighted the dual liability of employers and individual employees for discriminatory acts.

These precedents collectively shaped the Court's understanding of agency, vicarious liability, and the scope of employer responsibility under the Equality Act 2010.

Legal Reasoning

The Court's judgment delved into the interpretation of section 109 of the Equality Act 2010, which delineates the liability of employers for acts committed by employees and agents. Key points in the Court's legal reasoning include:

• Agency Relationship: The Court affirmed that Mr. Saini and Mr. Coxhill were agents of the union, not employees, thus falling under section 109(2). This means the union is liable for their discriminatory conduct within the scope of their authority.
• Scope of Authority: Referencing Heatons Transport, the Court established that agents acting within their prescribed functions (conducting meetings, representing the union in negotiations) are within the scope of their authority, making the union liable for their actions.
• Vicarious Liability: The judgment clarified that the union's liability under section 109(2) does not require the discriminatory act to be directed at a third party; liability arises from any discriminatory act committed within the scope of agency, including those directed at fellow union members.
• Interpretation of 'Related to': The Court addressed the legislative shift from "on the grounds of" to "related to" in the Equality Act, concluding that "related to" encompasses both causative and associative links, thereby broadening the scope of discrimination and harassment definitions.
• Constructive Dismissal: While upholding the ET's findings on unfair dismissal, the Court emphasized that the Claimant's resignation was a direct result of the union's failure to address the harassment, reinforcing the inclusive nature of constructive dismissal claims under discrimination law.

The Court meticulously dissected the distinction between employees and agents, reinforcing that agency relationships can extend liability even in the absence of direct employer knowledge or sanction of the discriminatory acts.

Impact

This judgment has significant implications for trade unions and their officials:

• Enhanced Accountability: Unions must ensure that their elected officials (agents) operate within their authority and adhere to anti-discrimination policies, as unions can be held liable for their agents' misconduct.
• Clarification of Agency Scope: The decision provides clarity on the interpretation of agency under the Equality Act 2010, indicating that conduct towards union members by agents can attract vicarious liability.
• Policy Implications: The ruling underscores the need for unions to implement robust grievance procedures and proactive measures to prevent harassment and discrimination, safeguarding both employees and the organization's legal standing.
• Future Litigation: The judgment sets a precedent for similar cases, potentially increasing litigation related to vicarious liability in discrimination and harassment claims involving unions and other principal-agent relationships.

Overall, the judgment reinforces the principle that organizations cannot shield themselves from liability simply by categorizing their officials as agents rather than employees, provided these agents act within their authorized scope and engage in discriminatory conduct.

Complex Concepts Simplified

Vicarious Liability

Vicarious liability is a legal principle where one party is held responsible for the actions of another, typically in an employment context. In this case, the union (as the principal) is liable for the discriminatory actions of its lay officials (as agents) because they were acting within the scope of their authority.

Agency Relationship

An agency relationship exists when one person (the agent) is authorized to act on behalf of another (the principal) in dealings with third parties. The judgment clarifies that for the equality laws, agents acting within their defined roles can bind the principal to liabilities arising from their actions.

Direct Discrimination vs. Harassment

Direct Discrimination involves treating someone less favorably because of a protected characteristic, such as sex. Harassment, on the other hand, refers to unwanted conduct related to a protected characteristic that violates a person's dignity or creates a hostile environment. This case illustrates both aspects, with the union being liable for both direct discrimination and harassment through its agents.

Constructive Dismissal

Constructive dismissal occurs when an employee resigns due to the employer's conduct, which fundamentally breaches the employment contract. The Claimant's resignation was deemed a constructive dismissal because the union failed to address the harassment adequately.

Conclusion

The Unite the Union v. Nailard judgment serves as a crucial clarification in the realm of employment and equality law, particularly concerning the liability of principal organizations for the discriminatory actions of their agents. By affirming that unions can be held liable under section 109(2) of the Equality Act 2010 for the actions of their lay officials, the Court has reinforced the necessity for organizations to maintain strict oversight and governance over their representatives.

This decision not only upholds the principles of accountability and fairness but also ensures that individuals within organizations are safeguarded against discrimination and harassment, regardless of the employment status of those perpetrating such acts. Moving forward, unions and similar entities must proactively enforce anti-discrimination measures and ensure that their agents are fully aware of and comply with legal obligations to mitigate the risk of vicarious liability.

In the broader legal context, the judgment underscores the evolving nature of vicarious liability and agency within employment law, setting a precedent that reinforces the protective intentions of the Equality Act 2010. This ensures that victims of discrimination and harassment have robust avenues for redress, thereby fostering more equitable and respectful workplace environments.