The People Bulletin

At this time of year many organisations are having to revisit their policies (often unwritten) on office relationships.  Such relationships are often frowned upon since they can give rise to perceptions of favouritism or unfair treatment as well as the perception of conflict of interest whether actual or not.  From a legal perspective, workplace relationships can give rise to a number of potential claims for which an employer can be held vicariously liable.

Pitfalls

The risk of allegations of favouritism and abuse of power whether accurate or not are particularly likely to arise where a senior employee is having a relationship with a junior member of staff.  There is also an increased risk of confidential information being disclosed which can cause an employer significant embarrassment.  For example, earlier this year Lord Triesman, the married Labour peer who was the Football Association chairman tasked with helping England secure the 2018 World Cup, resigned from his post once it became common knowledge that he had allegedly made disparaging comments about the Spanish and Russian football associations to a junior civil servant with whom he was allegedly having an affair.  There is also a risk of the more senior employee being blackmailed or accused of having left himself open to blackmail.

Legal implications

As well as raising tricky management issues these situations raise possible legal claims including

1. Breach of contract: Under English law there is an implied term that both employers and employees shall treat each other with respect.  This is known as the mutual term of trust and confidence.  Where there is an alleged relationship between two employees, an employer must ensure that it deals with the matter sensitively and in a confidential fashion.  Otherwise, an aggrieved employee could resign and claim constructive dismissal, seeking his or her notice pay in addition to pursuing a claim for unfair dismissal (discussed in more detail below).
2. Unfair dismissal:  Subject to the employee having the requisite length of service (at least 51 weeks), they could pursue a claim for unfair dismissal if they are dismissed due to allegations of having an affair with another employee or they resign due to the treatment they receive from their employer (or by another employee or a third party for whom the employer is vicariously liable) in light of the allegations.  Even if two employees are having a relationship, an employer would need to consider carefully whether it would be reasonable to relocate or dismiss one or both of the employees.  Difficulties can also arise after the end of a relationship, if the employees do not consider that they can work together any longer, at which point the employer may need to consider whether there are grounds for dismissal.
3. Sex discrimination: Employers will be liable for harassment by their employees unless they have taken all reasonable steps to prevent this occurring.  Further the Equality Act 2010 which came into force  on 1 October extends protection from harassment on the basis of all the protected characteristics under the Act including sex to harassment by third parties such as. clients or contractors who are not employed by your organisation.  In order for an employee to establish a claim for harassment they will have to demonstrate that the conduct complained of has occurred with the organisation’s knowledge on at least two occasions  and that you have not taken reasonable steps to prevent it.  Of note is the fact that the three occasions of harassment do not need to have been perpetuated by the same individual.  Organisations need to review their harassment policies to ensure they are sufficiently robust and cover harassment by third parties in the light of this extension.
4. Discrimination: The Equality Act 2010 prohibits discrimination and harassment on the grounds of sexual orientation including on the basis of perception of sexual orientation.  This means individuals can bring claims if they are perceived to have a particular sexual orientation, even if they do not.  In a case under the Employment Equality (Sexual Orientation) Regulations which preceded the Equality Act 'homophobic banter' directed at an employee who was not in fact gay was held to constitute harassment.   Consequently, in cases where an employee is being taunted about their sexual orientation, whether it is their actual or perceived sexual orientation, and there is a sufficient link for there to be vicarious liability, they may have grounds to pursue a claim for sexual orientation discrimination and harassment against the employer. 

In order to anticipate the difficulties that can arise when relationships arise in the workplace it will be sensible to have a policy in place to set out the organisation’s expectations in this area.  This will include rules on the disclosure of relationships (which might cover family relationships as well as intimate ones) that employees will cooperate with managers in making arrangements to address actual or potential conflicts of interest and guidance about how the organisation will handle cases so that employees are informed in advance of the implications that will arise if they form intimate relationships.

See also: 'Employment litigation on the rise' by Owen Warnock in The People Bulletin, July 2010

See also: 'Love in a cold climate' by Stephen Engelhard in The People Bulletin, 22 September 2010