The latest article in our series on the new duty on employers to prevent sexual harassment in the workplace looks at the extent to which employers may be liable for the acts of third parties, notwithstanding the removal of provisions expressly relating to third party harassment.
Third party harassment at work
In May 2023, a TUC poll found that of 1,000 women surveyed, 58% said they had experienced sexual harassment, bullying or verbal abuse at work, with 39% of sexual harassment incidents said to be carried out by a third-party. This figure rose to 52% of women aged 18 to 34.
The issue of third party harassment has been hotly debated over many years, both in the Tribunal system and in Parliament, with the most-recent position being that employers would only be liable for harassment of its employees by third parties where the employer had failed to take action to prevent such harassment and the reason for such failure was the protected characteristic itself.
In 2023, the initial draft of the Worker Protection (Amendment of Equality Act 2010) Act 2023 (the WP Act) sought to substantially change the legal position to expressly make employers liable for discriminatory harassment of their staff by third parties. However, the proposed provision was removed by the House of Lords, meaning that on the face of it employers will only be liable under the Equality Act for acts of third parties in very limited circumstances.
Much has been made in the press of the removal from the draft legislation of the third-party harassment provisions, but does this mean that employers are off the hook when it comes to harassment by third parties?
Duty not limited to taking steps in respect of acts by employees
Although on the face of it the WP Act does not change the circumstances in which an employer will be liable for third party harassment, the new duty to take reasonable steps to prevent sexual harassment in the workplace is broad and not stated to be restricted to a duty in relation to potential harassment by an employer's own employees.
This was expressly contemplated by the House of Lords in its debate on 14 July 2023 when Baroness Noakes said that "the new duty to prevent sexual harassment … now applies to third parties for the first time for some considerable time". The Equalities and Human Rights Commission (EHRC) has issued new draft guidance, which expressly and repeatedly refers to preventing sexual harassment by third parties.
Of course, in considering the issue of harassment and third parties, employers should not forget to consider what steps may be required to ensure that their employees do not harass any third parties with whom they come into contact during the course of their employment (and for which, therefore, the employer could be liable). The scope of the duty to prevent sexual harassment at work is intended to be wide-ranging.
The effect on liability
There is no new standalone claim under the Equality Act where employers fail to comply with the new duty. No new cause of action is created as regards acts of third parties.
However, a failure to take reasonable steps to prevent sexual harassment by third parties could result in an uplift of compensation for a successful sexual harassment claim by up to 25%. The wording of the WP Act indicates that all compensation awarded under the Equality Act by the Tribunal will be subject to the uplift – there is no requirement for the Tribunal to separately assign compensation to, and then only uplift compensation in respect of, acts of sexual harassment. The uplift could, therefore, be applied in circumstances where the employee is successful with any sexual harassment allegation that is unrelated to third party harassment, but in circumstances where the Tribunal finds a separate failure by the employer to take reasonable steps to prevent third-party harassment.
Whether or not the Tribunal makes adverse findings, the EHRC will be able to take enforcement action if it is concerned about a failure to prevent sexual harassment, including by third parties. We will explore this in a future article in this series.
For some employers, this perfect storm of adverse findings will present low risk. For others, the potential for increased financial penalties and/or for potential reputational damage will be significant.
It is also worth noting the Labour Party has made clear that they want to strengthen protections against sexual harassment in the workplace. The issue of liability for third party harassment is likely to be revisited by our new Government, as well as potentially expanding current rights and obligations to protect interns and volunteers.
What action should employers take?
It is already the case that the EHRC expects employers to have policies and practices to try to prevent harassment at work. The EHRC Code currently suggests the following steps, depending on the size and resource of the employer:
· Having a harassment policy.
· Installing a public notice advising third parties that harassment of its employees is unlawful and will not be tolerated.
· An express term in all contracts with third parties notifying them of the employer's policy on harassment and requiring them to adhere to it.
· Encouraging employees to report harassment by third parties, supporting employees who report harassment and taking appropriate action in respect of every complaint of harassment by a third party.
What will be appropriate and reasonable will vary from organisation to organisation. For some employers, the approach is driven by specific policies.
For others employers, detailed policies will not be adequately digested by the workforce and/or third parties, so visible and public signage making clear what behaviours will not be tolerated is crucial.
Our previous article looks at some of the considerations in deciding what policies are required and is available [here]. A more comprehensive look at evidencing compliance will be considered later in this series of articles, when we hope to have the final updated EHRC Code and Guidance.
The approach to risk will also be important, particularly bearing in mind that financial penalties for breach of the new duty are only imposed where there is a successful claim of sexual harassment. Where the risk of sexual harassment is higher, more will be expected of an organisation.
If you would like to discuss any issues connected to harassment, or preventing harassment in the workplace, please contact Ranjit Dhindsa.