Third party harassment liabilities: Do employers still need to tackle them?

Third party harassment liabilities taken off the table and duty to prevent sexual harassment diminished – do employers still need to take steps to tackle them without new laws?

There has been an increasing recognition of significant incidences of customers or other third parties treating frontline staff inappropriately and/or subjecting them to sexual harassment. USDAW recently published its report on Protecting Retail Workers which set out how one third of its members says violence, threats and abuse at work caused them anxiety about work and over a quarter had considered changing jobs as a result. That report goes on to share best practice and is well worth a read.

From a legislative point of view, in response to growing evidence and concerns about such offensive behaviour at work, Ministers proposed The Worker Protection (Amendment of Equality Act 2010) Bill ('the Bill').

That Bill is making its way through Parliament and has been significantly watered down in the process owing to concerns raised by Conservative Peers about free speech, the difficulty for businesses in attempting to regulate the behaviour of others and placing too heavy a burden on employers.

What was the Bill originally proposing?

The Bill originally proposed legislation which would:

• Reintroduce protection against harassment of employees by third parties where the employer has not taken reasonably practicable steps to prevent it. More unwieldy provisions giving protection against third party harassment under the original provisions draft of the Equality Act 2010 had been scrapped in 2013.

• Introduce a new proactive duty on employers to take all reasonable steps to prevent employees being sexual harassed at work.

• Provide Employment Tribunals with a new power to increase compensatory awards by up to 25% and provide for enforcement via the Equality and Human Rights Commission where an employer had failed to take all reasonable steps to prevent employees being sexual harassed at work.

What has been changed in the Bill following the House of Lords amendments?

The amendments by the House of Lords (which the Government have suggested they will accept to prevent the Bill from failing):

• Removes the protection against harassment of employees by third parties altogether.

This was in response to concerns about how this could work fairly for employers when it is difficult for employers to manage conversations by third parties which could be offensive (for example about social, political, moral, or religious subjects) – and some previously suggested amends which were complex and sat oddly amongst the established tests for harassment.

• Weakens the duty around sexual harassment – with the increase to compensation and enforcement via the Equality and Human Rights Commission only available where an employer has failed to take reasonable steps (rather than all reasonable steps).

This would suggest a lower bar is being applied to the duty – so the increased compensation and enforcement would only kick in where an employer has not taken some sensible action (rather than everything reasonably possible), but the actual interpretation and effect will need to be seen in application in forthcoming case law after the legislation is introduced.

What would these changes mean for employers?

If the amended Bill is passed:

• Employers have and remain liable (under the existing provisions of the Equality Act 2010) for any discrimination and harassment carried out by other employees unless the employer can show they took all reasonable steps to prevent the discriminatory act or harassment from taking place. This is a hard defence to establish; case law suggests that Tribunals have high expectations in relation to employers having policies and training against discrimination and harassment which is regularly updated, and employers should be able to demonstrate routine application of those policies where breached.

• Employers will not be liable for third party harassment i.e., for any harassment of the employees by parties that are not employed by them.

• Where an employee succeeds in a claim for sexual harassment against you (because you failed to take all reasonable steps to prevent it), the Tribunal can consider whether you also failed to comply with the new, and additional, duty to take reasonable steps to prevent and, if so, it can award the claimant additional compensation of up to 25% of their compensatory award (and the Equality and Human Rights Commission can take steps to enforce the finding).

Do employers no longer need to worry about third party harassment?

Employers absolutely still need to think about, and take steps to reduce/manage, harassment by third parties. Failing to do so risks:

• Claims for constructive dismissal (employees could rely on your failure to do anything about third party harassment as a fundamental breach of their contract or, in some circumstances, discrimination where you manage third party issues inconsistently).

• Negative PR

• Increased turnover of staff

• Difficulties recruiting

The Retail Trust's Health of Retail Report has uncovered a significant drop in wellbeing reported by retail workers in the last 12 months, with 21% saying that abuse from customers has contributed to this. So, in practice, if you want engaged and healthy workers, third party harassment needs to be tackled notwithstanding the lack of new legislation.

With the above in mind it would still be appropriate, particularly for larger employers, to consider:

• Our Retailers Against Harassment Certification.

• A policy on third party harassment which can be used as a guidance tool by managers and employees. This might cover:

• A business commitment that harassment or discrimination of your staff by third parties will not be tolerated.

• That employees are encouraged to report harassment and discrimination concerns relating to third parties and where/how they should do this.

• What steps you are taking to prevent it e.g., warning notices to customers, recorded messages at the beginning of phone calls.

• What steps you will take where there is a complaint e.g., warning/banning customers, reporting criminal behaviour to the police, sharing information with other branches.

Do employers need to do anything differently in relation to sexual harassment?

If you already have strong provisions in place aimed at deterring harassment and discrimination (clear policies, regular training for all staff and evidence of follow-through when issues arise), you do not necessarily need to take further steps in light of the amends to the Bill.

If your policies have not been reviewed for some time, it would be sensible to revisit them and consider updates against the recommendations set out by the Equality and Human Rights Commission. In particular:

• They recommend that employers should consider being transparent about outcomes to disciplinary processes for harassment and should change privacy notices to enable you to share details of sanctions or outcomes from formal processes with those who have raised complaints where it is appropriate to do so. This is worthwhile considering given the practical difficulties that are often created where you have a good reason for not dismissing an employee who has harassed or discriminated against someone (and issuing a slightly lesser sanction instead) but feel unable (owing to data concerns) to communicate what has been done and why to the complainant who can only see that they are still employed.

• Their suggestion to reference abuse of power over more junior colleagues as a factor to be taken into account is a sensible one.

• Their suggestion to refrain from emphasising malicious complaints in policies. Of course, someone who lies in a complaint should be subject to disciplinary action, but this is rare and is so obvious it does not need to be spelled out in discrimination and harassment policies (where it might put complainants off raising concerns given there is often a tendency for victims to second-guess whether the behaviour should be complained about).

• They suggest employers could designate and train 'Guardians' – employees who volunteer to have more in depth training on discrimination and harassment and who can support employees who have concerns or wish to raise a complaint.

Given the slightly different nature of sexual harassment, and the recognition that it is a growing issue however, you might also want to consider having a separate policy on sexual harassment - to avoid sexual harassment (which has slightly different tests) from being conflated with other harassment related to protected characteristics.

Where next for the Bill?

If it completes its passage through Parliament as anticipated, the amended Bill seems likely to become law in autumn 2023 and to come into force in autumn 2024. A Labour Peer has already indicated that a Labour Government might reverse the decision on removing the protection from third party harassment.

For assistance in relation to establishing policies and training against discrimination and harassment, or defending claims, please contact a member of our Employment team.

If you would like to ensure you are doing everything you can to protect employees (and gain great evidence to defend claims in the process) do consider our Retailers against Harassment Certification.