In the lead-up to the office Christmas party season, the decision of the Employment Appeal Tribunal in Nixon v Ross Coates Solicitors serves as a timely reminder to employers of the dangers of workplace gossip.

The Claimant in this case, Miss Nixon, had attended a staff Christmas party organised by the firm of solicitors where she worked. Miss Nixon was, at the time, in a relationship with a solicitor at the firm and was pregnant by him, although she did not know that at the time of the party. At the party, "a good deal was drunk by everybody". A number of hotel rooms had been pre-booked for those employees who were unable to travel home from the party. A group, including Miss Nixon, repaired to one of the rooms, where further drinks flowed. Towards the end of the night Miss Nixon and the office IT manager were seen kissing and those watching "knew it would not stop there". The IT manager secured a hotel room and requested it be charged to the firm's account, which was agreed. He and Miss Nixon then left together.

Miss Nixon did not return to work after the party until towards the end of January, following some annual leave and sick leave. On her return to work, Miss Nixon informed the firm's managing partner, Mr Coates, that she was pregnant. Miss Nixon alleged that "within an hour" of her telling Mr Coates, the HR manager of the firm had found out and had made a suggestion about the paternity of the baby which caused her considerable upset. Miss Nixon contended that the HR manager had been gossiping and spreading rumours about her pregnancy and about the father of the child.

Miss Nixon then asked if she could work at a different office, so that there would be no contact with the HR manager. This was accommodated for a short time, but she was subsequently told that she would have to return to her own office. Miss Nixon raised a grievance and never returned to work (and was not paid for any of the time away from work). She subsequently resigned by letter, saying her employer had made it impossible for her to return to work by the firm's failure to allow her to work in another office and failure to address her grievances.

Miss Nixon subsequently brought claims for constructive unfair dismissal, sex discrimination and discrimination on the grounds of pregnancy. Miss Nixon alleged that the HR manager's gossip amounted to harassment under the Sex Discrimination Act ("unwanted conduct that is related to her sex and has the purpose or effect of creating an intimidating, hostile, degrading, humiliating or offensive environment for her"). She also alleged that the rejection of her request to work in another office away from the HR manager, and her employer's refusal to pay her when she refused to return to work in her own office, amounted to sex/pregnancy discrimination.

The Tribunal who first heard the claim decided that Miss Nixon had been constructively dismissed. However it indicated that it would reduce compensation by 90% because of Miss Nixon's contributory conduct at the Christmas party in question.

The Tribunal decided that there was no discrimination against Miss Nixon, whether on grounds of pregnancy or on grounds of gender. It found that the HR manager's conduct had not amounted to harassment, that the employer's rejection of Miss Nixon's request to work from a different office had no "ingredient of sex discrimination" and that the withholding of her pay was wholly unrelated to her gender or her pregnancy - it was simply the case that she was not paid because she was not at work.

Before the Employment Appeal Tribunal ("EAT"), Miss Nixon argued that the Tribunal was wrong to make no findings of discrimination and that the Tribunal's reasons on compensation in respect of the unfair dismissal claim were wrong. The employer appealed against the finding of unfair dismissal, in particular because an offer had been made to Miss Nixon to make a formal complaint about the HR manager and because there were business reasons for which she should return to her own office.

The EAT decided that the HR manager's spreading of gossip about the paternity of Miss Nixon's child was connected with her pregnancy and did meet the definition of harassment under the Sex Discrimination Act, given that the gossip was unwanted and had the effect of causing an intimidating, hostile, degrading, humiliating or offensive environment for her.

The EAT also decided that the employer's requirement for Miss Nixon to return to work in her own office, and to withhold her pay until she did so, did in fact amount to acts of sex discrimination on grounds of pregnancy. The reason why Miss Nixon was treated in this way by her employers was related to her pregnancy.

The EAT upheld the finding of unfair dismissal but found that the Tribunal's dim view about Miss Nixon's conduct on the night of the Christmas party must not affect its compensation award, as the reason for her dismissal was not in fact her conduct at the party but was in fact the subsequent conduct on the part of her employer for which Miss Nixon was not responsible.

This case serves as a reminder of the breadth of the definition of harassment and how easy it is to fall foul of the laws against harassment, which remains the same under the new Equality Act 2010. It also illustrates that employees can bring successful harassment claims even where gossip about them has arisen because of very public conduct on their part.