UK: Managing Workplace Sexual Harassment And Misconduct Around The World

Last Updated: 2 May 2018
Article by Judith Martin

Most Read Contributor in UK, November 2018

Sexual abuse, harassment and misconduct continues to place higher up the political and social agenda globally following a raft of allegations in ever widening high-profile sectors. Increasing public awareness has burst the dam of secrecy, resulting in a tsunami of calls for greater transparency across many organisations and industries. As a consequence, corporate cultures must change to ensure appropriate safeguards are in place to protect the safety of employees, those they come into contact with and the organisations' own financial and reputational risks.

Harassment in particular appears to be at endemic levels, with a recent YouGov survey revealing 85% of women aged 18-24 in the UK had experienced unwanted sexual touching. Recent high profile developments in business, politics and the entertainment industry indicate the short-tail potential for claims prevalence. Indeed the first claim against Harvey Weinstein has been lodged in the UK emphasising the latency period for such claims is decreasing as a result of changing social norms. There is likely to be a sting in these shorter-tail claims for businesses with claims frequency set to increase.

Sexual misconduct is also receiving increased attention following prominent reports of several charities embroiled in scandals. The international scope of these issues highlights the increasingly globalised context for such abuse, creating new supply chain risks for multinational corporates and their insurers.

Most recently charities have been under the spotlight following the Oxfam scandal, which raised allegations of sexual misconduct by Oxfam workers after the 2010 Haiti earthquake. The Charity Commission, which normally receives reports of 50 serious incidents a week across all UK charities, has seen reports double, particularly in relation to safeguarding issues.

Recent cases broadening the scope of vicarious liability will also impose liability in wider circumstances. Once limited to the strict employer-employee relationship, it can now apply to relationships akin to employment, such as sub-contractors, where an individual is carrying out activities on behalf of the organisation, responsibility has been assigned to them and they are controlled by that organisation.

In this expanding vicarious liability regime, volunteers and gig economy workers present areas of potential liability. Given the global reach of many charities and other organisations, who sub-contract in a variety of jurisdictions, logistical issues arise in relation to ensuring adequate safeguards are in place when employing this workforce.

Harassment claims in particular present a number of difficulties for organisations. It is a form of discrimination claims that offer claimants a less evidentially onerous route to obtaining compensation. There is no requirement to prove foreseeability of loss and employment tribunals and courts can award damages for 'injury to feelings' without proof of psychiatric injury, in addition to financial losses caused by the act of harassment.

In the UK, Protection from Harassment Act claims have a limitation period of six years, presenting logistical difficulties with information management and retention. Accordingly steps must be taken both before and after notification of a claim to ensure that relevant documents are adequately preserved.

Management initiatives are vital for organisations seeking to mitigate the risk of claims. Businesses should proactively seek to prevent wrongdoing arising in the first place – but if it does still take place, if employers can demonstrate they took all reasonable steps to prevent the act of harassment from taking place, they may avoid liability. Policies (covering anti-harassment and bullying, equal opportunities, whistleblowing, grievances and disciplinary matters) must be up up-to-date and demonstrably routinely followed.

All relevant individuals (including sub-contractors and volunteers) should understand the expected workplace standards and the workforce should be aware of and be given training on the relevant policies, practices and procedures. Organisations must also ensure that appropriate management and supervision is in place and that individual job roles are carefully defined. As recent examples attest, failing to implement such systems can result in significant potential reputational harm if allegations do arise.

Whilst criminal records checks may go some way to managing risk, the scope of checks must satisfy risk management requirements (despite the resultant increase in costs and administrative burden) and must also comply with the new data protection rules coming into force on 25 May 2018 (GDPR).

Different logistical issues may arise in relation to ensuring adequate safeguards are in place when engaging wider categories of workers such as sub-contractors. Using credible, well established contractors who can demonstrate sound risk management, as well as securing clearly defined contracts setting out apportionments of liability is vital in mitigating risk in this new era.

However, even with preventative and protective measures in place, some claims are unavoidable. Insurance can play an important part in the risk mitigation matrix, to ensure policies cover the losses for which a business may be liable (including vicarious liability) as well as risks to the specific nature of the business. Organisations must ensure they have appropriate liability insurance in place, including identifying the appropriate levels and limits of indemnity. In order to ensure the validity of policies, insurers must be provided with an appropriate assessment of the risk pursuant to the duty of fair presentation.

Recordkeeping is fundamental both prior to and following allegations. Organisations must ensure they have robust document archiving and retention practices in place, particularly where work is assigned to contractors or volunteers.

Risk management policies should set out processes for the timely reporting of allegations, including mandatory reporting to the police and other agencies, as appropriate. This may assist in securing the offender's assets which may be important where recovery is pursued following successful claims by victims. This is likely to be an increasingly important issue as the number of claims rise, although consideration should also be given to any adverse reputational risks arising from this approach.

Corporates and their insurers are likely to be heading for choppy waters as allegations across a variety of forms of abuse continue to gather pace. Whilst it may be rare for most organisations to have to defend vicarious liability claims in the abuse or misconduct context, the potential financial and reputational risks mandate organisations to manage their risk profile. By engaging with this process, including implementing appropriate planning and robust management practices, businesses will be well placed to safely ride the waves.

Originally published in Commercial Risk on 30 April 2018 - http://www.commercialriskonline.com/managing-risks-associated-workplace-sexual-harassment-misconduct-around-world/

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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