Most employers will have a tried-and-tested approach to dealing with workplace sexual harassment. This is likely to involve staff training, the maintenance of up-to-date policy documentation, and an approach to ensuring issues are dealt with robustly when they arise. However, from October 2024, employers may need to go further to protect themselves from the risk of increased Employment Tribunal compensation awards in harassment claims.
From 26 October, organisations will be required to take 'reasonable steps' to prevent the sexual harassment of staff at work. Employers who fail to take such steps risk a compensation uplift of up to 25% in the event of a successful claim against them. Given that compensation awards for harassment claims are uncapped, there could be a high cost of failure to comply with the new duty.
In anticipation of the new duty, organisations will be wondering whether their existing approach to the management of workplace sexual harassment will be sufficient to comply. The answer is that in many cases, employers should now do more. Determining what constitutes 'reasonable steps' for an employer depends on individual circumstances. Factors such as the employer's size, the sector in which it operates, and the way it identifies and manages risks are all likely to be material. In order to effectively prepare for the new duty, employers should reflect on their current sexual harassment strategy, and make improvements where necessary. It is also sensible to make contemporaneous records to explain an employer's strategy and approach over time. This ensures that appropriate evidence can be presented to the Tribunal in the event of a future claim.
To understand the practical impact of this new law on employers, it is helpful first to reflect on recent legal and policy developments in this area. Numerous high-profile cases and campaigns have highlighted the need for enhanced protection against sexual harassment at work. It was against the backdrop of campaigns such as the #MeToo movement that the Government consulted in 2019 on a proposal to reform the law in this area. This consultation prompted the Government's original plans to introduce:
The original Bill, when it was introduced to Parliament, set out to achieve both these things. However, as the Bill progressed, it was amended. The resulting Worker Protection (Amendment of Equality Act 2010) Act 2023 (the Act) introduces the mandatory duty to protect staff from workplace sexual harassment. It contains no express protection against harassment by third parties, although this is not to say that employers should not consider any particular risk posed to their staff by third parties at work.
The Act introduces a mandatory duty on employers to take 'reasonable steps' to prevent sexual harassment of employees in the course of their employment (mandatory duty). The original proposal for the duty to encompass a requirement to take 'all' reasonable steps, was removed by the House of Lords. The rationale given at the time to explain this amendment was that as the new law was to apply to third-party harassment, it would require employers take an "almost infinite" number of steps to comply. The concern was that compliance with a new duty expressed in these terms would place too high a burden on employers. For this reason, the requirement to take 'all' reasonable steps was watered down.
Employers should nevertheless be wary of falling into the trap of thinking that because of this amendment to the Bill, nothing is changing in terms of their legal obligations. The mandatory duty is a much broader duty than any other obligation existing under existing anti-harassment law. The question of what will constitute 'reasonable steps' for any individual employer merits careful consideration and will depend on factors such as the type of organisation and the particular harassment risks that are present at that workplace (see below).
Employers and HR professionals might be aware that under existing law, there is a potential defence available to employers facing harassment claims, where the employer can show they took "all reasonable steps" to prevent the employee from carrying out the harassment (reasonable steps defence). Where the reasonable steps defence succeeds, the employer will escape liability, leaving the harasser potentially personally liable if they have been named as a respondent in the litigation.
The new mandatory duty is different from the existing reasonable steps defence. The reasonable steps defence applies in a much narrower context, ie in demonstrating that an employer took necessary action to prevent a particular employee (the alleged harasser) from displaying a particular behaviour (the alleged harassment). In contrast, the mandatory duty will apply on an organisation-wide basis to all employees and is likely to call into question the organisation's culture and approach more generally.
Despite the comments made in the House of Lords when the Bill was debated, the express provisions relating to third-party harassment were also removed from the Bill before it was passed as the Act. These provisions were removed due to concerns over freedom of speech and the practical burden that would be placed on employers with respect to policing the behaviour of third parties such as customers.
The removal of the third-party harassment provisions from the Bill has caused discussion amongst commentators in anticipation of the impact of the new law. Employers should note that although the explicit third-party harassment provisions were removed from the Act, the new mandatory duty may still encompass a requirement to manage the risk of third-party harassment where relevant. Again, the particular requirements of any given organisation will depend on the sector in which they operate and the particular risk of staff being exposed to third-party harassment at work. Employers should therefore consider the risk of third party harassment as part of the general requirement to comply with the mandatory duty.
There are two ways the new mandatory duty will be able to be enforced:
In order to pursue an employer for breach of the mandatory duty, an employee will need to bring a successful harassment claim under the Equality Act. If that claim succeeds, the Tribunal may apply the compensation uplift at an appropriate percentage to reflect the extent to which the employer has breached the mandatory duty.
The Tribunal may be likely to apply the compensation uplift to any successful sexual harassment claim. This is because, for the claim to succeed in the first place, the employer will either have failed to invoke the reasonable steps defense or will have been unsuccessful in doing so. If an employer has failed in the reasonable steps defence, it is likely to also fail to show that it has complied with the mandatory duty. In real terms, the practical impact of the mandatory duty is likely to be a compensation uplift of up to 25% in almost any successful sexual harassment claim. Given that sexual harassment is a claim for which the Tribunal has the power to award unlimited compensation, a failure to comply with the mandatory duty could prove very costly.
There is currently no explicit liability on an employer for third-party harassment since the relevant provisions of the Equality Act were repealed in 2013. The current legal framework relates to the conduct of an employer or individual employees only. This means that if the treatment suffered by a worker is purely third-party harassment, it will not be possible to bring a successful sexual harassment claim in respect of which the compensation uplift can be applied.
It would however be short-sighted of an employer to disregard the issue of third-party harassment purely on this basis. If an organisation fails to address the potential for third-party harassment, it could significantly influence the level of compensation uplift the Tribunal may award in a successful sexual harassment claim involving employee conduct.
The EHRC has the power to investigate alleged non-compliance with equality law. In the event of a breach, the EHRC can issue notices to organisations in relation to their unlawful acts. A notice would require the organisation to prepare a draft action plan setting out how it will remedy its breach. The EHRC may approve the plan or require improvements to be made to it. Generally speaking, the EHRC takes enforcement action against individual employers rarely but may do so in the event of serious breaches of equality law.
The EHRC will be the only entity able to bring standalone enforcement action against an employer for failing to comply with the mandatory duty. As employees will need to first bring a successful sexual harassment claim before accessing the compensation uplift, they will not be able to enforce the mandatory duty without also having suffered harassment.
Having tracked the complicated progress of the Bill (now the Act) over the past few years, employers may now be reviewing how best to prepare to meet the mandatory duty in October. The EHRC is consulting over the summer with a view to updating its Technical Guidance in September. In the meantime, employers can already be following the steps set out below.