The Worker Protection (Amendment of Equality Act 2010) Bill proposes new obligations on employers to prevent harassment. Many consider the amendments proposed to be the most significant changes to discrimination law since the Equality Act 2010 (EqA).

Current law

Currently, under the EqA, anything done by an employee in the course of their employment is treated as having also been done by the employer. An employer can be liable for harassment irrespective of whether the harassment is done with the employer’s knowledge or approval. Employers do have a defence, however, if they can show that they took all reasonable steps they could to prevent it from happening.

Alongside the EqA, the Equality and Human Rights Commission (EHRC) helps employers to prevent discrimination and harassment and can use its enforcement powers when alleged incidents are reported. This includes the EHRC conducting investigations into organisations, issuing unlawful act notices and issuing action plans. Alternatively, the EHCR can give the organisation an opportunity to enter into a legally binding agreement with them, known as a section 23 agreement. In section 23 agreements, the organisation voluntarily undertakes not to commit an unlawful act, and the EHRC agrees to refrain from taking enforcement action. The EHRC then monitors compliance with the agreement and implementation of any action plan that has been agreed as part of that process.

Recent EHRC action

In March, the EHRC entered into a section 23 agreement with IKEA UK, to improve its policies and practices in relation to sexual harassment, following a complaint raised by a former employee. IKEA has committed to reviewing the way it deals with complaints and also how it meets its responsibilities under the EqA. This includes having a zero-tolerance approach, working with an external legal provider to review its policies and procedures and to improve its responses to complaints, and providing training on those new policies to HR and all line managers.

In February, shortly before this agreement, the EHRC entered into a similar agreement with McDonalds. In this agreement, McDonalds committed to similar actions to IKEA, however, they also agreed to conduct an anonymous survey of workers, deliver training for all employees with specific training for managers so they can identify areas of risk, support franchisees and monitor progress towards a safe, respectful and inclusive working environment. The additional commitments are unsurprising, since the agreement was not preceded by one complaint (as in the IKEA case), but multiple employee complaints.

Why do we need the Bill?

Nevertheless, and despite these protections against harassment, the EHRC has warned that some employers consider that a low incidence of reporting sexual harassment means that there is no issue in their workplace, or there is an assumption that policies and procedures are enough to prevent sexual harassment. However, making this assumption and not taking action can be hugely damaging to the victims, they say.

The ongoing scandal at the CBI is a prime example of this. The Guardian recently reported that CBI’s apparent failure to deal quickly and effectively with complaints of sexual harassment and violence, meant that victims felt their only option was to take their complaints to the press rather than raise them with their employer, resulting in weeks of revelations and damage to the CBI brand.

As the Financial Times put it, “… all the policies in the world won’t help you if no one uses them.” The CBI had grievance and whistleblowing policies and an anonymous complaints process in place, however, CBI has said concerns did not reach senior ranks and that it “tried to find resolution in sexual harassment cases” rather than sacking those concerned, a vicious circle that deterred others from coming forward.

Coupled with a sentiment that many perceive still exists i.e. that sexual harassment is ‘not that big a deal’ or is ‘just a bit of banter’, it may come as no surprise that in 2016 a TUC poll (aptly titled ‘Still just a bit of banter?’) showed that 52% of women had experienced harassment in the workplace. In 2021, another TUC poll told us that the percentage of those experiencing sexual harassment rose even further where the woman had another protected characteristic, with 68% of disabled women experiencing harassment in the workplace. If we add to that 36% of women in the 18 – 34 age bracket reporting that they have experienced harassment, abuse or violence perpetrated by third parties (TUC poll 2018), it starts to become clear why further legislation is still necessary.

Historically, there used to be protection against third party harassment provided by s40 of the EqA. However, that protection was limited, largely due to the ‘three strike rule’; that an employee had to show that an employer was aware of two or more incidents of third party harassment in order for them to be liable. It was, therefore, rarely used and was then repealed in October 2013. In the case of Unite the Union v Nailard [2018], the lack of protection against harassment by third parties without this provision was identified and the Court of Appeal concluded that this was a matter for Parliament.

What does the Bill say?

So is the Bill the answer to these problems and what does it mean for employers?

The Bill, if passed, will:

• reintroduce liability for the harassment of employees by third parties, going further than the historical protection in that no previous incidents will be necessary;
• introduce a proactive duty for employers to take all reasonable steps to prevent sexual harassment of its employees in the course of their work; and
• give that proactive duty some real force by providing for enforcement via the EHRC and an uplift to compensation for sexual harassment of up to 25% where an employer has failed to take those reasonable steps.

There were real concerns following the initial introduction of the Bill about the impact these new protections would have on freedom of speech. In response, the government has made some changes to the Bill and has clarified that, whilst it is not intended that this new protection will prohibit freedom of speech of others and those expressing opinions, it is certainly expected to prevent targeted, improper or grossly offensive conversations in the workplace, such as racial insults. To that end, employers will not be liable for acts that might normally amount to harassment but where:

• the conduct in question is a conversation in which an individual is not a participant, or it is speech which is not aimed at an individual,
• in either case it involves an expression of an opinion on a political, moral, religious or social matter, and
• the opinion is not grossly offensive and there is no intent to violate dignity.

However, it should be noted that this carve out does not apply to sexual harassment.

What does this mean for employers?

As proposed, this means that there will be an onus on employers to protect their employees from conduct and conversations of third parties, and also in respect of work colleagues (being an add on to the current discrimination law on harassment).

Further, as drafted, it seemingly creates a two tiered system, where there is a lower bar to prove sexual harassment (where the carve out does not apply) and a higher bar for all other forms of harassment (including on the grounds of sex, sexual orientation and race). Coupled with the inherent difficulty that must follow for employers and tribunals having to determine which conversations are excluded from the protection and those that are caught, it seems likely that if the Bill passes, there will inevitably be a period of great uncertainty.

Assuming the Bill passes, which seems likely, the protection will come into force one year from the day it passes.

It is therefore imperative that employers use the period whilst the Bill is passing through Parliament to get comfortable with what their obligations will be and put in place the correct policies, procedures and training to ensure that they can show they have taken all such steps to prevent sexual harassment in the workplace, whether by employees, contractors, agents, customers or any other third parties.

That is all well and good to say, but what does that look like in practice?

First and foremost, employers will have to update all of their policies and procedures so that these new protections are clearly spelt out. They should be rolled out to all employees with training on their application. Employers may even wish to consult with their employees before shaping those policies, getting their input as to how they feel they could be affected in the workplace by harassment, including by third parties.

It may be sensible to provide specific, tailored training to line managers and senior staff who are responsible for ensuring compliance with such policies and procedures. Carrying out a risk assessment of the various roles in the business and how likely third party interaction affects such roles, would also be sensible.

In customer facing roles, the risk is, of course, going to be higher. Clear and unequivocal statements as to an employer’s ‘zero-tolerance’ policy and approach to harassment of their staff should also be particularised and set out for third parties, perhaps by way of clearly displayed signs or notices. Some employers might also wish to consider having a central register of all harassment complaints raised, so that they can keep track of any areas with particular issues or trends and so that they can ensure they are addressed quickly. However, that would need to be carefully executed considering data protection rules.

This is set to be a very complex area of discrimination law and it is not one we would advise employers embark on without getting specific legal advice. The cost of getting it wrong, as we all know, can be extensive with no cap on compensation in discrimination claims in the tribunals, plus a potential 25% uplift on that compensation when employers fail to take all reasonable steps to prevent harassment.

Employment

Contact: Matt McDonald  matt.mcdonald@shma.co.uk

Philip Pepper philip.petter@shma.co.uk