When are employers liable for race discrimination? Key insights from a recent EAT decision

In this article, we look at a recent Employment Appeal Tribunal (EAT) decision which highlights that employers will not always be vicariously liable for discriminatory acts by employees –specifically where the conduct falls outside the course of employment and the employer can demonstrate it took all reasonable steps to prevent such behaviour.

The case: Campbell v 1) Sheffield Teaching Hospitals NHS Foundation Trust 2) Mr Wesley Hammond [2025]

The Claimant was a full-time trade union official employed by the NHS Trust. Mr Hammond, also employed by the Trust, was a former trade union member. Although Mr Hammond had indicated his intention to leave the union, membership subscriptions were still being deducted from his wages. After several attempts to resolve the issue, Mr Hammond visited the claimant’s office during his break to discuss the matter. An argument ensued, during which Mr Hammond made a comment which was capable of amounting to racial abuse.

The claimant subsequently filed a claim alleging racial harassment by Mr Hammond and argued that his employer, the NHS Trust, was vicariously liable under section 109(1) of the Equality Act 2010. The Employment Tribunal (ET) determined that the Trust was not liable as the although the incident occurred on the Trust’s premises during working hours, the conversation was between a union official and a union member about union membership, which fell outside the scope of the claimant’s employment.

Furthermore, the ET found that the Trust had taken all reasonable steps to prevent Mr Hammond committing acts of racial abuse. These steps included a range of policies and training initiatives, such as:

• An induction session attended by Mr. Hammond, during which the issue of “acceptable behaviour at work” and the Trust’s core values –

specifically, the “PROUD values” of affording dignity, trust, and respect to everyone –were emphasised

• An annual performance assessment of Mr. Hammond, which evaluated whether he was adhering to the PROUD values
• The display of the PROUD values on posters in areas where Mr. Hammond worked
• Mandatory training on equality and diversity issues every three years, with the most recent session less than 2 weeks before the incident. The training, conducted in small groups, included a PowerPoint presentation focused on promoting a positive attitude towards equality and diversity, showing respect for others, valuing people’s differences, and treating people with dignity.

The claimant appealed the decision to the EAT, which upheld the ET decision. The EAT determined that the ET had appropriately considered the factors for and against the argument that the comment was made in the course of Mr. Hammond’s employment and was entitled to attribute weight to those factors as it saw fit. The claimant did not challenge the decision on the grounds of perversity, nor could they.

Furthermore, the EAT concluded that the ET had correctly applied the statutory defence of “all reasonable steps” and that its conclusion was entirely reasonable. Given that no further steps had been suggested in the evidence or in submissions to the tribunal, the EAT found the ET’s conclusion to be fully justified.

Steps employers can take to prevent discrimination and harassment

This case serves as a reminder of the importance of proactive measures to prevent discrimination and harassment in the workplace. To not only safeguard against race discrimination claims but also strengthen their defence in case one arises, employers should consider taking the following steps:

• Update policies and grievance procedures: Ensure policies on discrimination, harassment, and bullying are robust, up to date, and compliant with the Equality Act 2010. Clearly define unacceptable behaviour, outline reporting routes, and demonstrate a commitment to dignity and respect
• Annual performance reviews: Incorporate employees’ adherence to organisational values—such as equality, dignity and respect—into annual performance assessments. The Trust’s annual review of Mr Hammond’s conduct helped reinforce its commitment to equality
• Display core values: Make your organisation’s commitment to diversity visible. Display key values and anti-discrimination messaging in prominent areas, as the Trust did with its “PROUD” values posters across its premises
• Provide regular training: Conduct mandatory training on equality, diversity, and inclusion. Regular refresher courses help maintain awareness and compliance
• Encourage employee feedback: Create channels for employees to suggest improvements to diversity policies. Actively engaging employees in policy development helps demonstrate a genuine commitment to equality
• Communicate policies effectively: Regularly update and communicate diversity policies across the organisation to ensure everyone understands their rights and responsibilities.

These measures not only help establish a respectful and inclusive workplace but also support the employer’s ability to rely on the ‘all reasonable steps’ defence, should a claim arise.

If you would like support reviewing your organisation’s equality, diversity and inclusion practices — or advice on managing workplace conduct and training — please contact our Employment Team, who will be happy to assist.