Sexual and third-party harassment in the workplace

Sexual and third-party harassment in the workplace: what’s the current position and what is due to change in 2024?  

On 26 October 2023, the Worker Protection (Amendment of Equality Act 2010) Bill received Royal Assent becoming the Worker Protection (Amendment of Equality Act 2010) Act 2023 (the “Act”). Its provisions are due to come into effect in October 2024. The Act introduces a new duty on employers regarding the prevention of sexual harassment in the workplace.

Whilst it may not come into force until later in 2024,  it’s prudent for all employers to consider preparing for the implications of the Act. In this article, we look at what the current law is, how it is going to change, and – importantly – what employers can do on a practical level in light of the impending new obligations.

What is the aim behind the Act?

The explanatory notes to the original Bill put before Parliament explain that, despite the protections in the Equality Act 2010 against sexual harassment in the workplace, “persistent reports and revelations” have emerged in recent years indicating “that it remains a problem within the workplace”. The Bill was a Private Member’s Bill sponsored by Liberal Democrat MP Wera Hobhouse who in her speech before the House of Commons said: “We have turned a blind eye to workplace sexual harassment for far too long. This Bill will help to prevent harassment, protect victims and change the culture around victim blaming”.

That sexual harassment continues to be an issue in the workplace has very recently been highlighted by the cross-party Treasury committee as part of its sexism in the City inquiry which focuses on the financial services sector. Angela Eagle, Labour MP and committee member has said: “And I think it’s fair to say that those of us who sat in on those roundtables were shocked and alarmed at the evidence that we took … It’s clear from the evidence we’ve taken that there has been no improvement whatsoever in the barrage of problems that female workers in the City face at work in the last 20 years … it’s just as bad and some of it is truly alarming.”

The extent of this issue is further highlighted by recent press coverage of sexual harassment in McDonald’s, with the UK CEO, Alistair Macrow, admitting that they are receiving workplace sexual harassment allegations on a weekly basis.

The UK Government had undertaken a consultation on Sexual Harassment in the Workplace in 2019 with the response published on 20 July 2021. As part of the response, there was a commitment to introducing two legislative measures – one addressing harassment from third parties, and one placing a duty on employers to take reasonable steps to prevent sexual harassment. Originally, the Worker Protection (Amendment of Equality Act 2010) Bill was taking forward both recommendations.

The Bill in its original form proposed to introduce employer liability for the harassment of their employees by third parties in the course of their employment if the employer had failed to take all reasonable steps to prevent the harassment. The harassment could have been related to any applicable protected characteristic and was not to be limited to sexual harassment. However, when the Bill reached the House of Lords Committee Stage the provisions dealing with third-party harassment were removed entirely with concerns being raised about, among other matters, its impact on free speech.

Consequently, the Act only deals with one of the recommendations from the consultation on Sexual Harassment in the Workplace, namely a duty on employers to take reasonable steps to prevent sexual harassment.

What right of recourse do employees currently have if subjected to harassment by a third party?

During the passage of the Bill reference was made to the Presidents Club Charitable Trust which was forced to close down in the wake of an investigation by the Financial Times. According to that investigation members of the all-male guest list subjected some of the 130 women employed as hostesses for the evening to sustained sexual harassment at a charity dinner in 2018. Baroness Burt of Solihull, before the House of Lords with reference to this dinner said: “the Equality Act 2010 currently provides no protections for people in such a situation, as the alleged harassment was conducted by a third party rather than a fellow employee. This is the loophole we are trying to close in the Bill”.

There are no provisions in the Equality Act 2010 which expressly address harassment of employees by third parties such as customers (Unite the Union v Nailard). Previous provisions dealing with third-party harassment were repealed from 1 October 2013.

Under the Equality Act 2010, an employee could raise a successful claim for direct discrimination against their employer if, for example, it was shown that an employer’s failure to deal with third-party harassment was because of a protected characteristic. The way an employer deals with third-party harassment could of itself amount to harassment. In the Employment Tribunal case of Owens v Euro Quality Coatings Ltd and ors the employer was found liable for harassment where it had failed for at least two weeks to remove a swastika which was drawn on the wall of the men’s toilets.

The Equality and Human Rights Commission’s (EHRC) Sexual harassment and harassment at work: technical guidance suggests that there may be situations in which third-party harassment could form the basis for an indirect discrimination claim. It provides the following example: “A hotel worker complains that she has been sexually harassed by a customer. Her employer says she does not take action in response to complaints about sexual harassment by third parties, as she feels that she is not responsible for what third parties do and ‘the customer comes first’. The employer would take no action regardless of whether the person harassed is a man or a woman. This practice places women at a particular disadvantage in comparison to men as statistics show that women are more likely to be sexually harassed at work than men. It is unlikely that the employer will be able to justify her practice of taking no action as she does not have a legitimate aim. It is not a legitimate aim to prioritise her customers over the safety of her workers”.

Nevertheless, it should be apparent that under the Equality Act 2010, it is very difficult for an employee to pursue any legal action against their employer where they have been subjected to harassment by a third party. However, an employee in these circumstances may have other recourse, such as being able to resign and raise a successful claim for constructive unfair dismissal. Employers also have obligations in relation to the health and safety of their employees such as a requirement to assess risks to their workers, including reasonably foreseeable risks of third-party violence. In addition to any legal or financial consequences of failing to take reasonable steps to prevent third-party harassment and/or of failing to deal adequately with complaints of third-party harassment, is the potential reputational damage to an employer if an Employment Tribunal claim is raised. Employers also risk not being able to retain staff and/or struggling to recruit new staff if it is known to be a workplace in which harassment of staff by third parties is tolerated.

For these reasons, employers should assess the particular risk of harassment from third parties occurring in their workplace and put in place appropriate measures to mitigate the risk. This may include visible signage that there is a zero-tolerance policy in place regarding harassment of any staff and a clear, well-communicated complaints procedure if any third-party harassment does occur.

It is worth noting that in the Labour Party’s Employment Rights Green Paper it states “Labour will also require employers to create and maintain workplaces and working conditions free from harassment, including by third parties”. As such, if Labour wins in the next General Election, this issue may well be revisited.

New duty to prevent sexual harassment

The Act introduces a new provision into the Equality Act 2010 which provides that “an employer (A) must take reasonable steps to prevent sexual harassment of employees of A in the course of their employment”. Once the Act is in force, if an employee successfully raises a claim for sexual harassment for which an award of compensation is ordered, the Employment Tribunal will be required to consider whether and to what extent the employer has also contravened its duty to take reasonable steps to prevent sexual harassment of employees. If the Tribunal considers that there has been a failure to comply with this duty, it may order that the employer pay an additional amount of compensation of up to 25% of the original compensation award.

While there will not be a standalone right for employees to raise a claim arguing that the new duty has been breached, given there is no statutory cap on the level of compensation that can be awarded in a successful sexual harassment claim, any uplift in compensation could substantially increase the overall award. In the latest Employment Tribunal statistics published for the period April 2022 to March 2023, the average award in cases with a sex discrimination jurisdiction was £37,607. By way of example, the maximum uplift of 25% on this average award would increase it to a little over £47k.

The EHRC will be able to take enforcement action against an employer who is in breach of the duty.

The Bill as it was originally drafted required employers to take all reasonable steps to prevent sexual harassment but, in the Act, the duty is to take reasonable steps. Consequently, an employer who has taken reasonable steps to prevent sexual harassment while not taking every reasonable step available can potentially avoid any uplift in the compensation.

What should employers be thinking about doing to comply with the new duty?

The EHRC is producing a statutory code designed to support employers to comply with the new duty. This code will draw on the existing Sexual harassment and harassment at work: technical guidance referred to earlier. It is anticipated that the size and resources of the employer will be relevant to the assessment of what is “reasonable” in all the circumstances.

While the statutory code is not available yet, we already know from existing case law and guidance some of the reasonable steps which employers can take. These include having a robust, up-to-date anti-harassment policy which deals with sexual harassment; regularly delivering effective anti-harassment training to the workforce which explicitly addresses sexual harassment; ensuring that employees know the process for raising any complaint about sexual harassment; dealing efficiently and appropriately with any complaints of sexual harassment; and if any complaints of sexual harassment are upheld, considering if any wider measures need to be implemented in the workplace to mitigate the risk of re-occurrence.

Employers would be well advised to start considering now if their anti-harassment policy is fit for purpose and checking when anti-harassment training was last delivered and how effectively it addressed sexual harassment. It is also open to employers to consider if there have been any complaints of sexual harassment upheld over the last few years and/or if there has been a pattern of complaints in any particular team, for example, which highlight areas that can be addressed now.

It’s also worth remembering the existing harassment protection under the Equality Act 2010 will continue to apply in respect of the protected characteristics of age, disability, gender reassignment, race, religion or belief, sex and sexual orientation. Therefore, any refresh of policies and training shouldn’t ignore these ongoing responsibilities.

Overall, the Act is not as far-reaching as originally anticipated. Nevertheless, it will introduce a new duty on employers which it is hoped is one positive step towards tackling sexual harassment in the workplace.

An amended version of this article first appeared in TES on 29 January 2024. 

https://www.tes.com/magazine/analysis/general/new-law-sexual-harassment-what-schools-should-know-teachers