Limiting liability – reforms to sexual harassment legislation

As of 26 October 2023, The Worker Protection (Amendment of Equality Act 2010) Act 2023 has completed its journey through both Houses of Parliament and has now received Royal Assent.

This piece of legislation creates a new statutory duty requiring employers to take “reasonable steps” to prevent sexual harassment taking place in the workplace. Where an employer fails to do so, any compensation awarded by a Tribunal in favour of a harassed employee may be uplifted by up to 25%.

The Equality Act 2010 already contains a statutory defence against harassment claims where an employer can show that they took “all reasonable steps” to prevent harassment taking place, but until now the law did not apply a positive duty on employers in this respect.

Eagle-eyed readers will note, however, that the obligation imposed by the new Act has a lower threshold than the Equality Act defence – the House of Lords amended the new Act to remove “all”, requiring employers to take only “reasonable steps” to comply with the new duty. At the House of Lords committee stage Baroness Scott of Bybrook recognised that this is a lower bar, but pointed out that the Act still creates a new duty, which represents an improvement for employees as against the status quo.

The Lords made another -more controversial- amendment to this Bill before it became law. Originally the new Act would have made employers liable for harassment of employees by third parties such as customers, clients, suppliers or contractors. This would have reintroduced part of equalities law that was repealed in 2013.

The Lords ultimately felt that this would have placed an unfair burden on employers, many of whom opposed the reintroduction of liability for the actions of third parties. This amendment will come as a disappointment to advocates for third party harassment liability, including Rachel Suff, senior policy adviser for employment relations at the CIPD, who said there was a “strong case” for reintroducing liability for harassment by third parties.

The new Act will take effect from October 2024.

The key take-away for employers is that it is now more important than ever that they have clear and robust policies and procedures on sexual harassment in the workplace and that these are well-communicated to the workforce. Best practice would also include regular training and a culture of welcoming and proactively dealing with complaints of sexual harassment.