Beyond the Office Walls: How Far Does Employer Liability Go in Sexual Harassment Cases?

November 26, 2025

Employers can be vicariously liable for discriminatory acts committed by their employees when there is sufficient connection between the act and the employee’s employment. Employers do not have to have direct knowledge or involvement, but the act must be committed ‘in the course of employment’. What does this mean in practice? We will be discussing the recent Employment Appeal Tribunal (EAT) decision in AB v Grafters Group Ltd to examine the question of how far ‘in the course of employment’ can extend.

Background

The Claimant was employed by the Respondent (a Hospitality Recruitment Agency). The Claimant believed that she was supposed to be working at Hereford Racecourse but had missed her transport. The Claimant was offered a lift by a colleague. The Claimant accepted and during the drive the colleague informed her that she was not meant to work that day. The Claimant asked the colleague to drive her home, but he refused and instead drove her to a golf club carpark. The Claimant stated that the colleague subsequently sexually assaulted her.

The Claimant reported the incident to the police and later informed her manager, who offered no further guidance beyond agreeing with her approach to inform the police. The employer did not undertake an internal investigation. The police arrested the colleague but ultimately no criminal charges were brought against him.

The Respondent’s position was that the incident between the Claimant and the colleague in the carpark did not take place in the course of the colleague’s employment.

Tribunal’s decision

The Tribunal ultimately determined that the colleague did sexually harass the Claimant but that the actions were not sufficiently connected to the colleague’s employment and therefore the Respondent was not vicariously liable for the sexual harassment. The reasons that the Tribunal cited for determining that the acts were not committed in the course of the colleague’s employment included:

  • The colleague was not due to work at Hereford Racecourse on that day;
  • The reason that the Claimant got into the colleague’s car was because she had missed the arranged transport;
  • The colleague’s motive for offering the lift was not because it was required by the Respondent; and
  • The colleague offered the Claimant the lift, the Respondent did not sanction this, have any knowledge of it, nor require it because the Claimant was not supposed to be at work.
Employment Appeal Tribunal’s decision

The Claimant appealed the Tribunal’s decision, and the appeal concerned the meaning of the term ‘course of employment’. The EAT determined that the Tribunal had erred in its decision. The EAT commented that the answer to the question of whether the conduct was in the course of employment is one of fact for the Tribunal to determine while having regard to all the relevant circumstances.

Some of the key points highlighted by the EAT are as follows:

  •  The law says that it ‘does not matter whether that thing is done with the employer’s…knowledge or approval’; and
  • Where the act is done outside of work, the Tribunal should consider whether there is a sufficient ‘nexus or connection with work’. This may include considering whether the circumstances are such as to make the situation an ‘extension of work and the workplace’.

The EAT determined that the Tribunal had not considered the above points but had instead focused on the fact that the colleague was not working that day. The EAT upheld the appeal and the claim has been remitted to the Tribunal for reconsideration.

Lessons for employers

The case is a reminder that employers can be vicariously liable for their employees even when the act is done outside of work or work-related events. The Employment Rights Bill will increase employers’ responsibilities regarding harassment and discrimination. It will still be possible for employers to avoid liability if they can show that they took all reasonable steps to prevent sexual harassment from occurring. As such, it will be even more important than ever to ensure that:-

  • Ensure handbooks, policies and risk assessments are up to date;
  • Have effective internal reporting mechanisms in place;
  • Run specific training for different levels in the business; and
  • Conduct thorough investigations, regardless of whether the alleged incident happened at work or a work-related event.
How we can help

For further information, or to discuss the issues raised within this case, please contact us to speak to a member of our Employment Team.

Darren Smith
Partner, Employment
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This reflects the law and market position at the date of publication and is written as a general guide. It does not contain definitive legal advice, which should be sought in relation to a specific matter.

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