Essential reading for all employers. Workplace bullying is a canker that is costing commerce and industry millions of pounds in lost time.

The UK’s four million small firms are being urged to urgently review their policy on workplace bullying following a landmark ruling in the House of Lords.

Business pressure group the Forum of Private Business (FPB), and its employment law partner law firm Mace & Jones, warned that the decision opened a new channel for bullying claims under anti-harassment laws. From now on employers can be held liable for workplace bullying by their employees.

FPB spokesman and Mace & Jones Head of Employment Law Martin Edwards said even if there is no claim of discrimination or constructive dismissal, employees can now hold their employers liable for bullying at work. "The judgement enables people to sue the employers of bullies under the Protection of Harassment Act,’ he said.

“The Act was brought in to criminalise ’stalking’ and until recently it was not widely recognised that claims could be brought under the act by employees bullied at work. The decision also exposes employers to claims by third parties who are bullied by employees of the company. The message for employers is to update their anti-bullying policies - and ensure they are implemented effectively.”