The Worker Protection (Amendment of Equality Act 2010) Act 2023 is due to come into force in October 2024.
Under this Act, employers have a duty to take ‘reasonable steps’ to prevent sexual harassment of their employees and Tribunals will be given the power to uplift compensation for sexual harassment by up to 25% if an employer is found to have failed in this duty.
What is sexual harassment?
Sexual harassment is unwanted conduct of a sexual nature that has the purpose or effect of violating a person’s dignity or creating an intimidating, hostile, degrading, humiliating or offensive environment for them.
Provided the conduct has this effect, it does not matter that this was not the intention. However, whether the employee’s reaction was reasonable will be relevant.
Examples could include inappropriate jokes, ‘banter’, intrusive questions, propositions, sexually explicit messages or images, inappropriate physical contact and sexual gestures.
What are employers’ current obligations?
Employers must not subject their employees to sexual harassment or treat their employees less favourably because they have rejected or submitted to conduct of a sexual nature.
Employers will be vicariously liable for the acts of their employees (provided those acts were carried out in the course of employment). However, if a claim of sexual harassment is upheld against an employer, there may be a defence available to it if the employer can show that it took ‘all reasonable steps’ to prevent that harassment or treatment.
Therefore, currently, employers only really need to demonstrate the preventative action they took if they wish to run the ‘all reasonable steps’ defence. However, in practice, many employers decide not to run this argument (unless an employee has clearly gone rogue) choosing instead to stand by, and reinforce, their employees’ actions. As such, it has been argued that there is not enough incentive for employers to put preventative measures in place.
The new duty
The new duty places a positive obligation on employers to take ‘reasonable steps’ in all cases to prevent sexual harassment of its employees during the course of their employment.
A failure in this duty does not give rise to a free-standing claim – the new duty is only examined by a tribunal once a claim for sexual harassment is made out.
However, the new duty can be enforced by the Equality and Human Rights Commission (EHRC) whose powers include to conduct an investigation into suspected harassment, to enter into a binding agreement with the employer to take action and to assist individuals with legal proceedings.
The EHRC can take action prior to a claim being presented to a tribunal but has also in the past approached a company once a claim has concluded to agree a legally binding action plan.
Harassment by third parties
Originally, when the new law was being discussed, there was talk of reintroducing a duty on employers to protect their employees against any harassment (not just sexual harassment) from third parties such as clients and customers. This third-party harassment protection used to be legally recognised but was repealed in 2013. However, this protection did not make it into the Act.
The wording of the new duty to prevent sexual harassment of employees is arguably wide enough to cover conduct by third parties as it requires the employer to prevent sexual harassment of its employees generally (i.e. it does not set out that the perpetrator needs to also be an employee). However, as it is not a freestanding claim and has to be considered as part of a successful sexual harassment claim it appears to be limited. We will have to wait and see whether a tribunal will consider any wider third-party sexual harassment when applying the uplift or if the EHRC will consider this when taking enforcement action.
For now, the current position remains that employers will only likely be liable for third party harassment where they fail to protect their employees from this because of a protected characteristic or where this amounts to a breach of health and safety obligations (if the risk of third-party harassment is foreseeable then the employer may have breached their obligation to provide a safe working environment).
However, employers may still be liable for their handling of the situation if this amounts to an unlawful act in itself.
How we can help
The new rules are designed to have employers take a more proactive approach. We can assist organisations by:
- Creating or reviewing anti-discrimination policies
- Reviewing and advising on anti-discrimination procedures including procedures for recruitment and promotion
- Providing new or refresher training for employees and senior management
- Advising on practices for reporting and investigating sexual harassment
- Reviewing disciplinary processes to ensure wider recommendations are considered where sexual harassment complaints are upheld
- Conducting risk assessments and considering other steps that may be appropriate for your organisation
At this stage it is not entirely clear how high the tribunals will set the bar when applying the ‘reasonable steps’ test but the use of wording ‘reasonable steps’ instead of ‘all reasonable steps’ suggests that the test has a lower threshold than that for the current statutory defence although many believe this won’t be the case in practice.
The EHRC is due to provide some technical guidance to assist employers with this duty. There may also be further reforms in this area in the not-too-distant future, particularly if Labour are successful in the general election as they have indicated a focus on sexual harassment reform and suggested they would look to revisit the issue of third-party harassment.
Given the potential financial implications of a 25% uplift being applied to compensation as well as reputational issues that may follow, employers would be prudent to consider their current practices and whether these would be sufficient to show reasonable steps have been taken to prevent this treatment and if not, take steps now to prepare.
Given the uncertainty around how the new duty applies to third parties and the fact that third party harassment is likely to come back on the agenda in the future, employers who operate in higher risk areas such as client/customer facing roles may want to take action now, for example by ensuring they display signage that abuse against staff will not be tolerated and provide a reporting mechanism for those who witness such conduct.
If you have any questions, please contact our Employment Law team, who would be happy to help.