The Worker Protection (Amendment of Equality Act 2010) Bill introduces a duty on organisations to prevent sexual harassment and reinstates employer liability for third-party harassment, albeit this time with a less complex legal test to meet.
The new duty on employers to take all reasonable steps to eliminate sexual harassment in the workplace will be enforceable by the equality regulator, the Equality and Human Rights Commission (EHRC). This proposed approach was discussed in detail in an earlier consultation and the government response. However, the detail on what was being proposed was missing from the consultation response. This bill fills in the gaps.
In its parliamentary briefing on the bill, the EHRC said it “will establish a mechanism for employees and employee representatives to notify us of breaches or potential breaches of the preventative duty”. Non-compliance with the preventative duty will potentially lead to a range of outcomes such as litigation, investigation and enforcement activity.
In addition, if an employee is successful in a claim for sexual harassment before an employment tribunal and the tribunal rules that the employer was in breach of their preventative duty, the tribunal will have the power to award an uplift in compensation of up to 25 per cent.
Liability for third-party harassment
The previous obligation on businesses over liability for harassment of its employees by third parties was repealed in 2013, after it had been deemed unworkable. It applied what was known as the ‘three strikes’ rule. An employee had to show two previous incidents of harassment by a third party before an employer could be held liable. The new provision is much more straightforward.
An organisation will now be liable if a third party harasses an employee in the course of their employment if the employer has failed to “take all reasonable steps to prevent the third party from doing so”.
The definition of a third party is drafted widely and currently refers to a person who is not an employee of the employer. This could cover customers, suppliers, business partners and other individuals or organisations that the employers’ staff come across in a work context, whether in a consumer-facing or B2B commercial context. This provision, unlike the new preventative duty, is not limited to sexual harassment, and covers the other relevant protected characteristics – in relation to harassment on the grounds of race, for example.
Could the creation of a preventative duty focused only on sexual harassment mean that businesses concentrate their limited resources on preventing discrimination between the sexes? That would be an unfortunate unintended consequence. Employers should make it clear that all forms of harassment will not be tolerated.
Uncertainty also remains over what precise steps employers should be taking to meet this new duty, although the EHRC has said that it will publish a statutory code of practice if the bill becomes law. Certainly, more will be needed than simply having anti-harassment policies and annual tick-box training. Recent case law has established that equality training needs to be relevant and fit for purpose.
Businesses now have an even greater imperative to focus on the culture of the organisation, including tackling well-known issues around tone from the top, how complaints of sexual harassment are dealt with, and tolerance of microaggressions.
It also remains to be seen how effective enforcement by the EHRC will be. That the EHRC has responsibility for enforcing the preventative duty sends a message that the aim is about improving workplace processes through proactive compliance, rather than creating another individual remedy that is reactive to bad behaviour. Whether the EHRC is able to act on potentially large volumes of notifications under this provision will depend on the level of additional resources allocated to it.
For all organisations, but particularly those with large customer-facing workforces, risk management of third-party liability will also take some careful thought. And it is a significant issue: the EHRC Turning the tables report highlighted that around a quarter of employees who reported harassment said the perpetrators were third parties.
Steps employers may take will depend on the nature of employees’ interactions with third parties; for example, whether they are customer facing or B2B, and interacting face to face or remote, or indeed hybrid. As a minimum, businesses should make clear in their relationships with all third parties the standards of behaviour that must be afforded to their staff. In a commercial or B2B context this may need to be reflected in contractual provisions.
As the bill has yet to clear the committee stage of the House of Commons, the changes may not be operational until early 2024.
Gillian MacLellan is a partner in CMS’s employment team