Are employers under a duty to protect employees from harassment by third parties?

Under the Equality Act, employers can be liable for discriminatory acts (including harassment) carried out by employees in the course of their employment. An employer may have a defence if it can show that it took ‘all reasonable steps’ to prevent the employee from carrying out the discriminatory act.

There were previously provisions in the Equality Act under which employers could also be liable for harassment of employees carried out by third parties, such as customers or clients. The provisions applied where the employer failed to take such steps as would have been reasonably practicable to prevent the harassment and the employer knew that the employee had been harassed in the course of their employment on at least two other occasions by a third party. However, those provisions were repealed in 2013.

The Government had committed, in a 2021 response to consultation on sexual harassment in the workplace, to introduce explicit protections for employees from third party harassment. It also committed to introducing a duty requiring employers to prevent sexual harassment and to supporting the Equality and Human Rights Commission (EHRC) in developing a statutory code of practice on workplace harassment.

Harassment by third parties

The Government is now backing a Private Members Bill that reintroduces the concept that an employer can be liable in certain circumstances for the harassment of employees by third parties such as customers or clients, over whom the employer does not have direct control.

If passed, the Worker Protection (Amendment of Equality Act 2010) Bill would create new liability for employers if their employees are harassed in the course of their employment by third parties and the employer has failed to take all reasonable steps to prevent the harassment. There will be no requirement for previous harassment to have taken place.

In specific circumstances, the employer will not be treated as having failed to take all reasonable steps to prevent harassment. This will apply where the harassment involves the expression of an opinion on political, moral, religious or social matter in a conversation that is overheard by an employee and which is not aimed at them; and where the opinion expressed is not indecent or grossly offensive. Where certain conditions are met, the employer will not have failed to take all reasonable steps solely because they did not seek to prevent the expression of the opinion that formed the harassment. The explanatory notes give the following example:

The employment tribunal finds that harassment related to race has occurred where an employee overhears a conversation between two other employees concerning the treatment of immigrants. The employer can show that they have taken all reasonable steps to prevent the harassment by having in place an effective anti-harassment policy. The policy does not need to include the prohibition of conversations about controversial topics in order for the employer to avoid liability.

Employers will still be expected to take steps to prevent targeted, indecent or grossly offensive conversation in the workplace. The explanatory notes give the following example:

The employment tribunal finds that harassment related to race has occurred where a black employee overhears a conversation between two customers which contains a racial slur. The employer will be expected to take reasonable steps in relation to conversations which are indecent or grossly offensive in order to avoid liability. Such steps may include having a policy of zero tolerance of such conversations (including by third parties) in the workplace

Statutory duty to prevent sexual harassment

The Bill would also create a new duty on employers to take all reasonable steps to prevent sexual harassment of their employees. What constitutes ‘all reasonable steps’ will depend on the specific circumstances of the employer. In most cases, the employer’s practices and procedures for preventing and dealing with sexual harassment are likely to be relevant.

The duty will be supported by the EHRC’s statutory code of practice on sexual harassment and harassment in the workplace, which has yet to be published. It has been reported that the code will be based on the guidance that the EHRC published in 2020 and will be the subject of consultation.

There will be no standalone claim that an employee will be able to issue in the Employment Tribunal for an employer’s breach of this duty. However, if the employee issues a successful claim of sexual harassment, Employment Tribunals would have to consider whether, and to what extent, the employer has breached its duty to take all reasonable steps to prevent the sexual harassment. If the duty has been breached, the Tribunal will have the ability to apply an uplift of up to 25% to any compensation awarded.

Comment

There is no specific detail in the Bill about what employers will need to do to show that they have taken ‘all reasonable steps’ to prevent third party harassment. It is to be hoped that further details will be set out in the EHRC Code. However, having effective policies and procedures in place that are well communicated, monitored and regularly reviewed is likely be an important factor.

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24 February 2023

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