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Employers to be liable for harassment of employees by third parties on their premises

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The government is supporting the Worker Protection (Amendment of Equality Act 2010) Bill, which had its second reading in the House of Lords on 24 March 2023.

The proposed legislation seeks to amend the Equality Act 2010, which among other things currently imposes a legal duty on employers to protect employees from harassment by colleagues. The legislation defines harassment as ‘unwanted conduct relating to a protected characteristic’ (i.e. age, disability, gender reassignment, race, religion or belief, sex or sexual orientation) where that conduct has the purpose or effect of ‘creating an intimidating, hostile, degrading, humiliating or offensive environment’.

Third-party harassment

If enacted, which is looking very likely, the Bill will introduce liability for employers for harassment of their employees by third parties, such as customers and clients. The employer will be deemed liable for such harassment where it fails to take reasonable steps to prevent the harassment.

Put simply, this is good for businesses; as a poor workplace culture impacts employee satisfaction and results in low employee engagement, leading to high staff turnover rates and low productivity. In addition, with all the media publicity around sexual harassment with #MeToo and recent Equality and Human Rights Commission (EHRC) investigations (McDonald’s), staff now have higher expectations of appropriate workplace culture. Employers who fail to prepare for the new harassment laws face an increased risk of discrimination claims (where compensation is uncapped), not to mention the risk of bad publicity.

The employer would be deemed liable for such harassment where it fails to take reasonable steps to prevent the harassment.

Notably, there are exceptions applicable to the duty, where the relevant act(s):

The new duty to prevent sexual harassment

The Bill also includes provisions relating to sexual harassment. Employers will need to demonstrate all reasonable steps have been taken to prevent such harassment from taking place.

Currently, an employer is vicariously liable for discrimination, harassment (including sexual harassment) or victimisation committed by an employee in the course of employment, unless it can show it took all reasonable steps to prevent its employee from committing a particular discriminatory act. Reasonable steps taken might include having an equal opportunities policy or an anti-harassment and bullying policy. The employer must also have taken steps to implement the policies, such as providing sufficient and regular training to staff and managers as well as regular reviews of policies.

This new duty to prevent sexual harassment will be enforceable by an Employment Tribunal where it has first upheld a claim for sexual harassment. A tribunal will have the discretion to award a ‘compensation uplift’ by increasing any compensation it awards for sexual harassment by up to 25% where there has been a breach of the employer’s duty in sexual harassment cases. A 25% uplift could be considerable, bearing in mind that the average sex discrimination award in 2021 was £24,630.

Undoubtedly, the proposed legislation creates difficulty for business owners, especially within the hospitality sector, when the onus is ultimately placed on them to have policies in place preventing customers from expressing themselves in a manner that may fall foul of legislation.

What are the implications for employers and how can they prepare?

Employers could face pre-emptive action from staff if there is no policy in place. Therefore, it is vital employers begin to consider how this legislation could impact their business and what policies regarding this legislation it should develop to avoid such claims. Whilst employers have a duty of care to their employees, how those in the hospitality sector can manage the conversations had by customers remains to be seen.

All employers should take action to comply with the new positive obligation to prevent sexual harassment, and those with customer/third-party-facing employees ought to do the same in response to the re-introduction of liability for harassment by third parties. Beyond simply trying to avail themselves of the defence that they took reasonable steps to prevent harassment, many organisations will want to use the discussion these changes will prompt as an opportunity to support their female workforce and others who are particularly vulnerable.

Steps to consider

Guidance available in tackling harassment at work

The Equality and Human Rights Commission’s guidance on sexual harassment and harassment at work contains steps employers should consider taking in order to prevent and deal with harassment at work. It is intended that the introduction of the employer duty will be supported by the EHRC’s statutory Code of Practice on workplace harassment, which is due to be published in time for the Bill’s implementation.

If you would like to discuss the impact of the Worker’s Protection Bill (Amendment of Equality Act 2010) on your business and how best to prepare, please contact our Employment team by submitting an enquiry form here.

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