Unite the Union v Nailard (Court of Appeal)

In brief

The Court of Appeal dismissed both the union's appeal and Ms Nailard's cross-appeal: the union was liable for sexual harassment by its elected branch officials as its agents, but failing to deal properly with known harassment was not itself discrimination or harassment. Ms Nailard, a regional officer, was sexually harassed by two elected, lay branch officials (Saini and Coxhill) who were not union employees. Separately, the union's employed officials (Hughes, Murray, Kavanagh) knew of the harassment, dealt with it inadequately, and one later transferred her against her wishes. These are two different groups and two different claims. Ground A, the union's appeal, was dismissed [41]-[45]. Section 109(2) EA 2010 makes a principal liable for anything an 'agent' does in the course of carrying out authorised functions (Kemeh applied, [43]). The court rejected ([42]-[45]) the union's argument ([33]-[34]) that agency liability requires the act to be directed at an outside third party: harassment of a fellow union representative still counted, and the union remains vicariously liable even though the harassers were not employees. Ground B, the claimant's cross-appeal, was also dismissed [104]-[110], and this is the more analytically important holding. Organisational failure to prevent or properly address known harassment is not itself discrimination or harassment. Liability for an omission requires the decision-makers' own mental processes to have been influenced by the protected characteristic: the 'reason why' test (Pearce v Mayfield School (HL) and Conteh applied). It is not enough that the complaints they mishandled were themselves sex-related. This applies to s.26 harassment as much as to s.13 ([90]-[99]), despite s.26's broader 'related to' wording: the 2013 repeal of the former s.40(2)-(4) third-party harassment provisions was a deliberate choice by Parliament, not silently reopened by 'related to'. The tribunal's contrary finding was legally flawed, and the EAT's remittal stands. This closes off the most commonly attempted claim: that the organisation should have stopped it. Decided 24 May 2018.

Key provisions

• [15] — s.109 EA 2010 (verbatim) : Full text of s.109(1)-(4) — framework — quote directly; note s.109(4)'s defence is expressly confined to A's employer, not to principals.
• [41]-[45] — Ground A: vicarious liability for lay/elected officials as 'agents' : The Union's appeal dismissed. Elected/lay non-employee officials performing authorised representative functions are 'agents' under s.109(2); liability is not confined to acts directed at outside third parties [33]-[34] — claimant — reaches well beyond trade unions: charity trustees, faith-body lay officers, professional-body committee members. The test is whether the agent acted 'in the course of the performance of their authorised functions'.
• [16(2)], [36], [45] — s.109(4) 'all reasonable steps' is unavailable to principals : An acknowledged statutory anomaly: the reasonable-steps defence applies only to employers under s.109(1), not to principals in respect of agents under s.109(2). Underhill LJ declined to cure it by narrowing 'agent': 'it cannot be right in principle to adopt what would otherwise be the wrong construction simply so that the anomaly would arise in fewer cases' [45] — claimant — Practical effect: where the harasser is a non-employee agent, the respondent has no reasonable-steps defence at all.
• [69]-[80], [104]-[110] — Ground B: the 'reason why' test for failure to act : Mere inaction over known sex-related harassment is not itself 'because of' / 'related to' sex. Liability for an omission requires the decision-maker's own motivation to have been influenced by the protected characteristic (Pearce v Mayfield School (HL) [88]-[89]; Conteh [76] applied). The ET's contrary reasoning was flawed; cross-appeal dismissed, remittal upheld — dual — the practically decisive point for most 'failure to protect' claims.
• [90]-[99] — No implied third-party liability via s.26 'related to' : The 'reason why' requirement applies to s.26 harassment as much as to s.13, despite the broader 'related to' wording. The 2013 repeal of the former s.40(2)-(4) third-party-harassment provisions was a considered policy choice, not silently reopened — framework — essential background for any s.40A (WPA 2023) comparison.
• [21] — 'Agent' tracks ordinary legal agency (Kemeh) : Agency concepts follow ordinary legal-agency principles, not a broad HR-integration test — framework — rebuts over-broad claims that any closely-integrated non-employee is automatically an 'agent'.

When relevant

Vicarious liability of membership organisations (trade unions, professional associations, clubs) for acts of their officials or representatives. Whether an 'all reasonable steps' defence under EA2010 s.109(4) is available. Third-party harassment in the context of associations. Relevant to policy analysis for membership organisations and their obligations under Part 3 or Part 7 EA2010.