New sexual harassment laws - Is your business ready?

On 26 October 2024, a new duty on employers to take reasonable steps to prevent sexual harassment comes into force. Employers need to be ready for this significant development, which reflects concern that too many workers are still being sexually harassed at work, despite sexual harassment being outlawed in the UK decades ago.  

The new duty

Under the new law, set out in Worker Protection (Amendment of Equality Act 2010) Act 2023, employers will have a positive duty to take 'reasonable steps' to prevent sexual harassment of their workers in the course of their work.  The new law is drafted widely enough to cover harassment by any person (eg clients and other business contacts) not just other workers.

Under current law an employer may avoid liability for sexual harassment by a worker by running the defence that it took 'all' reasonable steps to prevent that behaviour (although few employers meet this high hurdle).  However, there is currently no positive legal duty on the employer to take those (or any wider) preventative steps and, although the employer may be liable to pay a worker compensation for harassment, there is no additional penalty for its failure to take preventative measures.  This is what the new law seeks to address.

Wide range of remedies

The new duty will be enforced against employers in two key ways.

Compensation uplift

If an employer doesn’t comply with the new duty and is found liable for sexual harassment, it may have to pay an 'uplift' of up to 25% on the worker's compensation.

The precise amount will reflect the extent of the employer's failure – so more steps are likely to mean a lower uplift (and possibly no uplift or liability altogether).

EHRC enforcement

The Equality and Human Rights Commission (EHRC) – not employment tribunals – will have additional enforcement powers against employers who breach the new duty.  These are standalone powers related to the 'reasonable steps' duty, so do not depend on any sexual harassment actually having taken place.

The powers of the EHRC are wide-ranging and intrusive, and often accompanied by publicity. The EHRC has included tackling sexual harassment amongst the strategic objectives for the next three years on which it is currently consulting. On 26 September 2024 it updated its Sexual harassment and harassment at work: technical guidance (and brief 8-step guide)   in anticipation of the new law. 

What are 'reasonable steps'?

The specific steps that it may be reasonable to take in an effort to prevent sexual harassment will depend on the individual employer and its operations.  Policies, procedures and training are a must for all, but tribunals are wising up to employers who merely   'virtue signal' with these steps and do not actively create a culture in which sexual harassment is not condoned or tolerated. 

More is likely to be needed to show true engagement with the issues. For example:

• Does the leadership team lead by example?
• Are incidents of sexual harassment reported to the board or senior managers?  
• Are risk assessments undertaken and acted on?  
• Is there a culture of inclusivity, and willingness to listen?  
• Are complaints dealt with as more than a tick box exercise?  
• Are outcomes monitored?
• How are settlement agreements and NDAs used?  

More or different steps may be needed over time, so the employer's efforts should be reviewed and updated regularly.

The (re-)return of third party harassment?  

When the Worker Protection (Amendment of Equality Act 2010) Act 2023 was first proposed, it included the reintroduction of a direct remedy for workers who are harassed by third parties at work. This was dropped during the Bill's passage to becoming law, although failure to address the possibility of third-party harassment could be an issue that the EHRC focuses on if it decides to investigate whether an employer is complying with the new duty. It remains to be seen whether the Government will seek to reintroduce a direct right, or to enhance the duty in the Act further by requiring 'all' reasonable steps to be taken (the word 'all' having also been dropped). This should become clearer once the Employment Bill is published – look out for updates in the coming months.