The Worker Protection Bill - why employers could face more third-party harassment claims

The government is supporting new harassment laws which would significantly expand employers’ liability for harassment in the workplace. Under the new law, employers will become liable for harassment of their employees by clients, customers and other third parties. The new law also creates a positive duty to prevent sexual harassment of their employees by staff.

The Worker Protection (Amendment of Equality Act 2010) Bill) will amend the Equality Act 2010 and come into force one year after the Bill is passed. However, employers should not delay in getting ready since, irrespective of the new law, dealing with complaints of harassment is part of creating a positive workplace culture. Put simply, this is good for business. A poor workplace culture impacts on employee satisfaction and low employee engagement, leading to high staff attrition rates and low productivity.

In addition, with all the media publicity around sexual harassment with #metoo and recent EHRC investigations (such as McDonalds), staff now have higher expectations of appropriate workplace culture and greater awareness of their discrimination rights. So, employers who fail to prepare for the new harassment laws face increased risk of discrimination claims (where compensation is uncapped), not to mention the risk of bad publicity.

The new duty to prevent sexual harassment

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 might include having an equal opportunities policy or anti-harassment and bullying policy although the employer must also have taken steps to implement the policies. This might include providing sufficient and regular training to staff and managers and regularly reviewing the 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 also have a 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 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 and the highest was £184,000. Compensation for sexual harassment is uncapped and awards vary depending on the severity of the injury to feelings and loss of earnings.

The Equality and Human Rights Commission (EHRC) will also be able to take enforcement action for a breach or suspected breach of the duty. EHRC investigations can attract negative publicity and take up significant management time. A recent example of this was when the EHRC investigated the handling of sexual harassment complaints made by staff at McDonald’s UK restaurants. This led to the restaurant chain committing, very publicly, to a legal agreement setting out how it intends to address sexual harassment in the workplace going forward.

Third party harassment

If the Bill is passed in its current form, staff who are harassed by clients and customers or other third parties will be able to bring harassment claims against their employer. Third parties include anyone who is not an employee so could include consultants and agents as well as clients and customers.

This is not the first time employers will be liable for harassment of their staff by third parties. The “three strike” rule (first introduced in 2008 and revoked in 2013) exposed employers to liability for third party harassment of their employees where the employer “knew” about two previous occasions in which it had occurred. When this rule was in force, press coverage focused on the unreasonableness of the liability the press perceived was being imposed on employers.

At present employers are generally only liable for third party harassment where their failure to intervene is a result of their own discrimination (such as where a male worker is sexually harassed by a customer and the employer ignores his complaint, whereas had the worker been a woman the employer would have taken the matter more seriously and taken action to address it). However, the new Worker Protection Bill creates a new, more onerous employer liability and goes one step further than returning to the law as it was pre-2013.

Under the Bill as it currently stands, liability for harassment by third parties will arise without there needing to be a prior incident, unless the employer can show they took all reasonable steps to prevent the harassment taking place. What is reasonable will depend on the circumstances including the size and resources of the employer but it might, for example, include requiring customers to follow the employer’s equality and diversity and anti-harassment policies. It will also involve taking worker complaints seriously and acting appropriately to deal with them.

The new law will therefore mean employers will be far more exposed to claims than previously. Moreover, this doesn’t just apply to sexual harassment – protection from third party harassment relates to all protected characteristics.

Guidance on tackling harassment at work

The Equality and Human Rights Commission’s technical guidance on Sexual harassment and harassment at work (published in January 2020) contains detailed steps employers should consider taking in order to prevent and deal with harassment at work. According to the Bill’s explanatory notes, 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.

Next steps

• You should keep track of the Bill’s progress through Parliament and look out for a consultation on the EHRC Statutory Code on harassment, as well as more guidance from the government which will help employers to better understand their legal responsibilities to protect staff from harassment, including sexual harassment.
• Employers should assess their ability to rely on the reasonable steps defence to harassment at work (generally) and prepare for the new statutory reasonable steps defence to third party harassment by reviewing and revising their own strategy, policies and training for preventing and tacking harassment.
• Employers should also review the staff and manager training and consider whether a training refresher is due. A recent case found that the reasonable steps to a harassment claim was not met because the equality and diversity training delivered to employees 20 months before the harassment was “stale”.

We can help provide advice on what employers can do to meet the reasonable steps defence. We can also review your policies, deliver training to your staff and managers, and provide additional advice on setting up practical measures to tackle harassment. Let us know how many staff you wish to train and we can provide a fixed fee quote.

See our flyer for more information.

To find out more, please join us for our webinar on 30 March 2023: Discrimination risk – Significant new harassment laws, and risk with positive action and stereotyping