The new law on sexual harassment in the workplace: what is it and why does it matter?

From 26 October 2024, employers will be under a new legal duty to take reasonable steps to prevent the sexual harassment of staff at work. Gareth Edwards takes a closer look at the background of the new law and what it will mean in practice.

The importance of an effective strategy for workplace sexual harassment

Most employers will have a tried-and-tested approach to dealing with workplace sexual harassment. This is likely to involve staff training, the maintenance of up-to-date policy documentation, and an approach to ensuring issues are dealt with robustly when they arise. However, from October 2024, employers may need to go further to protect themselves from the risk of increased Employment Tribunal compensation awards in harassment claims.

From 26 October, organisations will be required to take 'reasonable steps' to prevent the sexual harassment of staff at work. Employers who fail to take such steps risk a compensation uplift of up to 25% in the event of a successful claim against them. Given that compensation awards for harassment claims are uncapped, there could be a high cost of failure to comply with the new duty.

In anticipation of the new duty, organisations will be wondering whether their existing approach to the management of workplace sexual harassment will be sufficient to comply. The answer is that in many cases, employers should now do more. Determining what constitutes 'reasonable steps' for an employer depends on individual circumstances. Factors such as the employer's size, the sector in which it operates, and the way it identifies and manages risks are all likely to be material. In order to effectively prepare for the new duty, employers should reflect on their current sexual harassment strategy, and make improvements where necessary. It is also sensible to make contemporaneous records to explain an employer's strategy and approach over time. This ensures that appropriate evidence can be presented to the Tribunal in the event of a future claim.

So how did we end up here?

To understand the practical impact of this new law on employers, it is helpful first to reflect on recent legal and policy developments in this area. Numerous high-profile cases and campaigns have highlighted the need for enhanced protection against sexual harassment at work. It was against the backdrop of campaigns such as the #MeToo movement that the Government consulted in 2019 on a proposal to reform the law in this area. This consultation prompted the Government's original plans to introduce:

• A new duty for employers to take 'all reasonable steps' to protect workers from sexual harassment in the workplace
• Express protection for workers against third-party harassment at work

The original Bill, when it was introduced to Parliament, set out to achieve both these things. However, as the Bill progressed, it was amended. The resulting Worker Protection (Amendment of Equality Act 2010) Act 2023 (the Act) introduces the mandatory duty to protect staff from workplace sexual harassment. It contains no express protection against harassment by third parties, although this is not to say that employers should not consider any particular risk posed to their staff by third parties at work.

New mandatory duty

The Act introduces a mandatory duty on employers to take 'reasonable steps' to prevent sexual harassment of employees in the course of their employment (mandatory duty). The original proposal for the duty to encompass a requirement to take 'all' reasonable steps, was removed by the House of Lords. The rationale given at the time to explain this amendment was that as the new law was to apply to third-party harassment, it would require employers take an "almost infinite" number of steps to comply. The concern was that compliance with a new duty expressed in these terms would place too high a burden on employers. For this reason, the requirement to take 'all' reasonable steps was watered down.

Employers should nevertheless be wary of falling into the trap of thinking that because of this amendment to the Bill, nothing is changing in terms of their legal obligations. The mandatory duty is a much broader duty than any other obligation existing under existing anti-harassment law. The question of what will constitute 'reasonable steps' for any individual employer merits careful consideration and will depend on factors such as the type of organisation and the particular harassment risks that are present at that workplace (see below).

Is the new mandatory duty just the 'reasonable steps' defence in disguise?

Employers and HR professionals might be aware that under existing law, there is a potential defence available to employers facing harassment claims, where the employer can show they took "all reasonable steps" to prevent the employee from carrying out the harassment (reasonable steps defence). Where the reasonable steps defence succeeds, the employer will escape liability, leaving the harasser potentially personally liable if they have been named as a respondent in the litigation.

The new mandatory duty is different from the existing reasonable steps defence. The reasonable steps defence applies in a much narrower context, ie in demonstrating that an employer took necessary action to prevent a particular employee (the alleged harasser) from displaying a particular behaviour (the alleged harassment). In contrast, the mandatory duty will apply on an organisation-wide basis to all employees and is likely to call into question the organisation's culture and approach more generally.

Third-party harassment

Despite the comments made in the House of Lords when the Bill was debated, the express provisions relating to third-party harassment were also removed from the Bill before it was passed as the Act. These provisions were removed due to concerns over freedom of speech and the practical burden that would be placed on employers with respect to policing the behaviour of third parties such as customers.

The removal of the third-party harassment provisions from the Bill has caused discussion amongst commentators in anticipation of the impact of the new law. Employers should note that although the explicit third-party harassment provisions were removed from the Act, the new mandatory duty may still encompass a requirement to manage the risk of third-party harassment where relevant. Again, the particular requirements of any given organisation will depend on the sector in which they operate and the particular risk of staff being exposed to third-party harassment at work. Employers should therefore consider the risk of third party harassment as part of the general requirement to comply with the mandatory duty.

How will the new duty be enforced?

There are two ways the new mandatory duty will be able to be enforced:

• The Employment Tribunal may apply a compensation uplift of up to 25% for breach of the mandatory duty, in successful sexual harassment claims (compensation uplift)
• The Equality and Human Rights Commission (EHRC) will be able to take direct enforcement action against employers who breach the mandatory duty

Compensation uplift

In order to pursue an employer for breach of the mandatory duty, an employee will need to bring a successful harassment claim under the Equality Act. If that claim succeeds, the Tribunal may apply the compensation uplift at an appropriate percentage to reflect the extent to which the employer has breached the mandatory duty.

The Tribunal may be likely to apply the compensation uplift to any successful sexual harassment claim. This is because, for the claim to succeed in the first place, the employer will either have failed to invoke the reasonable steps defense or will have been unsuccessful in doing so. If an employer has failed in the reasonable steps defence, it is likely to also fail to show that it has complied with the mandatory duty. In real terms, the practical impact of the mandatory duty is likely to be a compensation uplift of up to 25% in almost any successful sexual harassment claim. Given that sexual harassment is a claim for which the Tribunal has the power to award unlimited compensation, a failure to comply with the mandatory duty could prove very costly.

Can a failure to prevent third-party harassment be enforced?

There is currently no explicit liability on an employer for third-party harassment since the relevant provisions of the Equality Act were repealed in 2013. The current legal framework relates to the conduct of an employer or individual employees only. This means that if the treatment suffered by a worker is purely third-party harassment, it will not be possible to bring a successful sexual harassment claim in respect of which the compensation uplift can be applied.

It would however be short-sighted of an employer to disregard the issue of third-party harassment purely on this basis. If an organisation fails to address the potential for third-party harassment, it could significantly influence the level of compensation uplift the Tribunal may award in a successful sexual harassment claim involving employee conduct.

EHRC enforcement action

The EHRC has the power to investigate alleged non-compliance with equality law. In the event of a breach, the EHRC can issue notices to organisations in relation to their unlawful acts. A notice would require the organisation to prepare a draft action plan setting out how it will remedy its breach. The EHRC may approve the plan or require improvements to be made to it. Generally speaking, the EHRC takes enforcement action against individual employers rarely but may do so in the event of serious breaches of equality law.

The EHRC will be the only entity able to bring standalone enforcement action against an employer for failing to comply with the mandatory duty. As employees will need to first bring a successful sexual harassment claim before accessing the compensation uplift, they will not be able to enforce the mandatory duty without also having suffered harassment.

Practical steps for employers

Having tracked the complicated progress of the Bill (now the Act) over the past few years, employers may now be reviewing how best to prepare to meet the mandatory duty in October. The EHRC is consulting over the summer with a view to updating its Technical Guidance in September. In the meantime, employers can already be following the steps set out below.

• Risk assessments: A good starting point is to carry out a risk assessment in order to identify the key risks in your organisation's workplace or sector. This task can be approached in much the same way as your organisation would approach a health and safety risk assessment exercise. Risk assessments should be carried out regularly and the findings should be used to inform your organisation's anti-harassment strategy and mitigate identified risks.
• Staff listening exercises: It can be useful to carry out a staff listening exercise, where staff are encouraged to share their experiences of how they have been treated at work. Regular staff listening exercises can be useful to identify themes and particular risks that can then be fed into the organisation's risk assessment and appropriately managed. Where themes and learning points do emerge from a listening exercise, it can also be useful to reflect on how the organisation can measure progress and change over time.
• Prepare for investigations: It is sensible to review and refine procedures for conducting prompt and thorough investigations into complaints of harassment. Your organisation should ensure that investigators are trained and that processes are fair and unbiased.
• Staff and line manager training: Your organisation is likely to already provide staff and line managers with equality and anti-harassment training. It may be appropriate to review and update this training in light of the new mandatory duty. VWV offer Anti-Harassment & Bullying in the Workplace online trainingfor your staff to help you create a safe working environment.
• Policy review: It may likewise also be appropriate to review and update your organisation's anti-harassment policies. As well as the bullying and harassment policy, it may also be appropriate to review and update policies such as the staff code of conduct. Where your organisation maintains any policies or other documentation relating to its interactions with third parties, it may also be useful to review and update these to set out your organisation's expectations in respect of the behaviour of third parties towards staff. Organisations may wish to wait for the updated EHRC Technical Guidance before taking this step.
• Monitor and review: Your organisation's approach to anti-harassment should be tested and regularly reviewed over time. A particular action might be effective for now, but in future, a different approach might be better advised. It is essential that the steps set out above are regularly repeated so that your organisation can continue to learn, and so that staff continue to have an opportunity to feedback and share experiences.

Gareth Edwards is a partner at VWV.