It’s time to take action – the new duty on employers to prevent sexual harassment

It seems in recent years, unfortunately, that we have never been far from the next high profile case involving allegations of sexual abuse in the workplace. Last month allegations of widespread historical sexual abuse of female workers at Harrods by its former owner, Mohamed al Fayed, came to light during a BBC investigation. A year ago the fast food giant McDonald’s admitted it was receiving up to two sexual harassment claims every week.

The situation for workers may be about to improve with a change in the law to introduce a positive duty on employers to prevent sexual harassment occurring in the workplace. From 26 October 2024, when the new law comes into force, written policies alone will not be enough for an employer to discharge their responsibility under this new duty. Instead, the focus will be on assessing the risks in the workplace and taking appropriate action to create a safe working environment where sexual harassment does not take place.

The new duty includes prevention of worker-on-worker harassment and harassment by third parties such as an employer’s customers or service users.

Significantly, the new duty is limited to preventing sexual harassment only so does not apply to other types of discrimination or harassment, for example relating to race, age or disability.

What is the new law?

The new law is contained in the Worker Protection (Amendment of Equality Act 2010) Act 2023 which amends the Equality Act 2010 (EqA 2010) to introduce a duty on employers to take reasonable steps to prevent the sexual harassment of their employees in the course of their employment.

The law as amended does not create a new cause of action by workers for failure by an employer to comply with the new duty. However, the changes to the law have the following effects:

• If an employment tribunal upholds a complaint of sexual harassment and finds that the employer did not take reasonable steps to prevent it happening then the compensation being awarded to the claimant can be increased by up to 25%.

• The remit of the Equalities and Human Rights Commission (EHRC) is extended to enable it to take enforcement action against employers failing to comply with the new preventative duty.

Unlike in unfair dismissal claims where the compensation is generally capped, in discrimination claims (including for sexual harassment) the compensation is uncapped. Accordingly, a 25% increase in the compensation figure could represent a significant sum if the tribunal makes a large award.

What is sexual harassment?

Sexual harassment is defined in section 26(2) EqA 2010 and occurs where both:

• A engages in unwanted conduct of a sexual nature.
• The conduct has the purpose or effect of either violating B's dignity, or creating an intimidating, hostile, degrading, humiliating or offensive environment for B.

When determining whether conduct had the effect of violating B's dignity, or creating an intimidating, hostile, degrading, humiliating or offensive environment for B a tribunal will consider B’s perception, the other circumstances and whether it would be reasonable for the conduct to have that effect. Therefore, complaints by the ultra-sensitive are not likely to be upheld.

The EqA 2010 does not give examples of behaviour that would be considered unwanted conduct of a sexual nature. However, in its recently updated technical guidance on sexual harassment and harassment at work the EHRC states that it includes a wide range of behaviour including:

• sexual comments or jokes
• displaying sexually graphic pictures, posters or photographs
• suggestive looks, staring or leering
• propositions and sexual advances
• making promises in return for sexual favours
• sexual gestures
• intrusive questions about a person’s private or sex life or a person discussing their own sex life
• sexual posts or contact on social media
• spreading sexual rumours about a person
• sending sexually explicit emails or text messages
• unwelcome touching, hugging, massaging or kissing

An act of sexual harassment can be a single event, it does not have to happen multiple times to constitute harassment. A perpetrator cannot rely on an argument that the conduct was not “unwanted” just because the victim did not expressly object to the behaviour at the time it occurred or because they “joined in” with “banter”. In Munchkins Restaurant Ltd and another v Karmazyn and others 2009 the claimants were waitresses who had worked in the restaurant for between one and five years. During their employment they were required to wear short skirts and subjected to talk of a sexual nature by the proprietor, Mr Moss, who asked them about their sex lives. Sometimes the women would complain about his behaviour but he would become angry when they did so. Mr Moss’ evidence was that they joined in with this behaviour, for example by asking him about his love life. Upholding the claims for sexual harassment and constructive dismissal the tribunal found that Mr Moss’ conduct was unwelcome. The claimants’ behaviour of engaging with sexual talk was a coping mechanism. It did not mean that Mr Moss’ behaviour was not unwelcome.

Importantly, behaviour that was previously accepted by someone can become unwanted at a later point. For example, where employees in a relationship break up and one will not accept the situation, that person’s behaviour could become sexual harassment.

The Statutory Defence

Employers are generally liable for the unlawful discriminatory acts of their employees done in the course of their employment.  However, section 109(4) of the EqA 2010 provides a statutory defence to employers if they can show they took “all reasonable steps” to prevent harassment. This may absolve the employer of liability.

The difference in the wording in that section of the EqA 2010 compared to that used in relation to the new duty on employers to prevent sexual harassment is interesting. It is unclear what the difference is between “reasonable steps” and “all reasonable steps” and therefore whether in a case where the tribunal finds that the employer had not failed in the new preventative duty because it had taken “reasonable steps” it would avoid all liability under the statutory defence. Clarity on this issue may have to wait for case law decisions emerging from the courts and tribunals.

Risks for employers who do not comply with the new duty

As set out above, employers held liable for incidents of workplace sexual harassment face uncapped compensation awards which are likely to be significantly increased where the new preventative duty has not been complied with.

But there are equally important reasons why employers must seriously consider this issue. Successful sexual harassment claims against an organisation can cause serious reputational damage. In regulated sectors such as medical and financial services incidents of sexual harassment are likely to amount to serious breaches of professional standards that employers will be obliged to report to their regulators.

Additionally, it is likely that organisations with workplace cultures that allow sexual harassment to take place are potentially more likely to have staff recruitment, retention and productivity issues.

What do you need to do now?

Different employers will clearly have different workplace cultures and issues. Some will already have good systems and procedures in place. Others may have given little thought to the risks of sexual harassment of their staff. However, all employers should consider the new duty and take appropriate action so that they can demonstrate that they comply with the new preventative duty.

Whilst there is no “one size, fits all” approach, the following are likely to be steps that compliant employers will have taken:  

• Risk assessment – the employer should carry out an assessment of the risks of sexual harassment occurring in its workplace. This should be recorded in writing and periodically reviewed. It should consider how and when sexual harassment in that organisation might take place. For example, a youthful male dominated sales team might be considered a risk where ‘laddish’ behaviour has become prevalent. Or a law firm that had predominantly male partners, predominantly female assistant lawyers and the attendant power imbalance between genders might represent a particular risk for that firm. If your employees socialise after work, especially where alcohol is involved, or if they travel together for work assignments these could be considered higher risk scenarios. Remember, employers may be liable for and will have a duty to prevent sexual harassment in the course of employment. This will include at work related events potentially including social activities and when travelling or staying away from home. Another risk may be sexual harassment by third parties (for example, by the employer’s customers). Although, employers are no longer liable for harassment of their workers by third parties the new duty extends to preventing sexual harassment by third parties according to the EHRC’s technical guidance (however, see below regarding third party harassment under Future Developments).

• Written sexual harassment policy – you should have a written policy in place that makes it clear that sexual harassment will not be tolerated and make staff aware of the policy. The policy and its effectiveness should be kept under review. For example, you could conduct a staff survey to establish whether employees are aware of the contents of the policy.

• Staff training – all staff need to be trained and training should be topped up. As with the risk assessment, training should be specific to the workplace. For example, case studies used in the training should ideally reflect the workplace the employees inhabit and deal with scenarios that might be more likely to happen in that workplace. In some organisations the same training might be suitable for all staff. In others it might be appropriate to tailor the training for different staff. Whilst everyone at work will have some responsibility in this area, managers and senior staff are likely to have a greater responsibility to prevent sexual harassment and recognise when action is needed.

• Deal with any complaints – how an employer deals with a complaint of sexual harassment is likely to be crucial. Your sexual harassment policy (and associated policies and procedures) should be robust and set out clearly in writing what should happen when an incident occurs. This will include taking any necessary disciplinary action against perpetrators, where appropriate.

• Reporting – consider the reporting mechanisms you have in place and whether they should be improved. The key is to encourage staff to report incidents and ensure they feel safe doing so.

• Support staff – you should try to ensure that employees who are affected by sexual harassment (this could include witnesses as well as victims of sexual harassment) are appropriately supported and protected including against retaliation. Victims have often decided not to report incidents for fear they will not be believed or supported or branded trouble makers.

Future developments

Time will tell but our view is that the new duty on employers to prevent sexual harassment is a significant workplace legal development. Meanwhile, the law in this area is already set for change further to the government’s wide-ranging Employment Rights Bill introduced on 10 October 2024. The Bill provides that the new duty will be amended to require employers to take “all reasonable steps” to prevent sexual harassment rather than the “reasonable steps” that will currently be required under the new law. In addition, regulations may be introduced setting out what are to be regarded as reasonable steps. Furthermore, third party harassment liability will be reintroduced for employers. The Bill covers multiple reforms and is at an early stage so it is unclear at the moment when these changes are likely to come into effect.

For further information contact David Seals or Elizabeth Barrett.