Developments in third-party harassment

2024 has seen significant developments in employer liability for third-party sexual harassment. Further changes, as set out in the Employment Rights Bill 2024-25 (the Bill), will expand liability and widen the scope of protection, requiring employers to be more proactive and take more comprehensive preventative steps.

Background

The provisions in the Equality Act 2010 (the Act), which made employers liable in some circumstances for third-party harassment of their employees, were repealed on 1 October 2013.

Since 26 October 2024, employers are to take reasonable steps to prevent sexual harassment of their employees, including by third parties. Where this duty is breached, employment tribunals can uplift the employee’s discrimination compensation by up to 25%, and the Equality and Human Rights Commission has the power to investigate and take enforcement action.

The Bill will introduce amendments to the Act, reintroducing direct employer liability regarding all forms of third-party harassment across all protected characteristics (age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex, and sexual orientation). This is a significant expansion in liability.

Third-party harassment under the Employment Rights Bill

Once the relevant clause of the Bill comes into force, employers will be required to take all reasonable steps to prevent third-party harassment to avoid liability. This is a high, onerous threshold and a notable increase from the “reasonable steps” standard. Factors like the size of the organisation, cost, and practicality will be relevant to determining what is “reasonable”.

An employer will have permitted a third party to harass one of its employees if both of the following apply:

• The third party harasses the employee in the course of their employment with the employer.
• The employer failed to take all reasonable steps to prevent the third party from harassing the employee during their employment.

Comment

Employers should review and update harassment prevention measures, provide regular training (including for contractors), and consider indemnity clauses in commercial contracts. Public-facing businesses (such as hospitality and retail) may need to implement measures such as zero-tolerance signage and increased security to manage this risk.

A helpful starting point for employers in implementing anti-harassment measures is the EHRC’s technical guidance on sexual harassment and harassment at work. Further guidance will likely be published before the relevant clause of the Bill comes into force.

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