What does the Al-Fayed case mean for employers?

The allegations against Harrods owner Mohamed Al-Fayed are particularly egregious, but they could have lasting ramifications for employment law, explains Dan Parker

The maelstrom of recent allegations of sexual harassment emerging from Mohamed Al-Fayed‘s ownership of Harrods is deeply concerning. On one hand, the task of reckoning with these allegations is likely to be enormous and painful for all concerned; on the other, it is both important and necessary.  

The last few years have seen a growing number of employers forced to conduct investigations whilst under intense public scrutiny – see, for example, the process regarding Christian Horner at Red Bull Racing – and there is a growing body of best practice as to what they should entail.  However, given the nature and timing of these ever-broader allegations, Harrods faces particular and potentially extreme challenges.

It is worth remembering that employers of all sizes are obliged to investigate issues raised by their own employees. There is a statutory Code of Practice for how employers should deal with such complaints, which can range from serious misconduct to interpersonal squabbles.  

Employers do sometimes face ‘X said, Y said’-type allegations, which may call less for findings of fact and more for solutions such as mediation.  Here, however, that is plainly neither possible nor appropriate. There is a justified desire to investigate and establish what has happened and to learn related lessons. 

Part of the difficulty of satisfying that is timing. The alleged perpetrator is now deceased. Others surrounding him may also have died, retired or simply moved on to careers elsewhere. A well established and large retailer such as Harrods should have a better ‘institutional memory’ than some other businesses; however, it is under different ownership, the retail industry is one of high staff turnover and recovering evidence from many years ago is likely to be incredibly difficult.  

Employment tribunals are not equipped to deal with historic allegations

For context, in most employment claims the employee is required to take the first step towards the Employment Tribunal within around three months of the incident complained of.  While the Labour government has pledged to extend that to six months, there is no sense that Employment Tribunals – let alone employers themselves – are equipped to deal with allegations from decades ago.  For this reason, it may well be necessary to explore other legal avenues for redress.

That is not to say that all attempts at accountability are futile. Serious and persistent wrongdoing rarely takes place in a vacuum. Questions will inevitably be asked about who knew about the alleged conduct and who may have condoned it through their inaction or, worse still, actively facilitated it. No doubt, Harrods is presently checking the whereabouts of any individuals referenced by those affected. If they are still employed by Harrods, there is no reason in principle why they could not still be sanctioned where appropriate.  

The law itself is changing to take a keener interest in these issues. From 26 October, changes to the Equality Act 2010 will come into force, obliging any Tribunal which has found sexual harassment to look at whether the employer took reasonable steps to prevent it.  If not, the complainant may receive up to 25 per cent in additional compensation.  

Expecting employers to be proactive, rather than merely responding to harassment allegation, is increasingly the norm

Expecting employers to be proactive, rather than merely responding to harassment allegation, is increasingly the norm. Timely guidance has just been issued by the Equalities and Human Rights Commission who has recommended that employers should look at risk factors such as ‘power imbalances’, ‘customer-facing duties’ and ‘the workplace demographic’. 

Clearly, these changes cannot address what has been alleged at Harrods in the past. However, the guidance provides a roadmap as to how it can send a swift and clear message to consumers, employees and potential recruits about its current values. Whether this shift in the law will make a broader impact upon sexual harassment at work is much harder to tell.   

 Dan Parker is senior associate in the employment and partnership team at Forsters