Running a small business is challenging enough to forget that as an employer you’re also responsible for the behaviour of your employees in the workplace. One of the most serious problems a small business owner might face is vicarious liability.

Here’s a step-by-step guide to help you understand vicarious liability and protect yourself from it.

What exactly is vicarious liability?

According to the law, employers can be held legally responsible for acts of discrimination or harassment as long as these happen in the workplace or are somehow connected to an individual’s employment.

Where does it apply?

You can be held vicariously liable for discrimination or harassment that occurs including:

  • employer-sponsored events (conferences, training, workshops)
  • social functions that are related to work (like Christmas parties)
  • business trips
  • field trips

You can also be liable if computers, phones or tablets that are connected to the workplace are used to harass someone, be it on social media, via texts messages or email connected to your business. In these cases, you might be vicariously liable if the offender is your employee or contractor and the victim is either your employee, contractor, your contractor’s employee, or even a visitor to your workplace.

However, you won’t be liable if the offender is a visitor or if it’s your contractor’s employee, as long as they don’t act as your agent. Naturally, you’ll only be held liable if you’re not able to demonstrate that you took some precautions to prevent such behaviours.

How to minimise your liability?

You need to demonstrate that you’ve taken “all reasonable steps” to prevent discrimination or harassment from happening at your small business. It’s also good to show that these measures worked before resolving incidents of harassment or discrimination.

What are “all reasonable steps”?

There’s no clear definition of these steps, because what may make sense for a large company may not be reasonable for a small business. These steps are interpreted on a case-by-case basis, but you need to actively minimise the risk that discrimination occurs at your workplace.

What to take into account when developing your strategy?

If you’re trying to define what the reasonable steps for your organisation are, here are several factors you should take into account:

  • the size and structure of your business
  • the type of work done at your office
  • the demographics of your employees (age, gender, disabilities, diverse backgrounds)
  • the business culture
  • level of employee supervision
  • history of discrimination or harassment incidents
  • working hours

Here’s how to avoid being liable in your small business.

Develop a strict and clear policy

Describe in the simplest form what unlawful discrimination, harassment and bullying means. Then sketch the consequences of breaching your policy.

Train your employees

Train your employees in the policy and relevant processes. One way to do that is by conducting regular information sessions where you share the policy.

Intervene early

You’ll easily spot frictions and slip ups before they become real conflicts. Make sure to intervene as soon as possible.

Don’t put it off

Communicate to the offender that their behaviour will not be accepted at the workplace in a clear and calm manner. Communication is crucial.

Behaviour outside of working hours

You can’t control your employees all the time. Make it clear in your policy that certain rules still hold even if they’re not on the clock.

Social media

You need to develop a social media policy which covers all the basic rules and helps employees understand the consequences of their online conduct on your business.

Let the offender go

If an employee habitually offends another person, you risk vicarious liability legal action. That’s why you may need to simply let them go. If you claim that their behaviour is unacceptable, you need to take action.

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