Companies who don’t currently take a zero tolerance approach to sexual harassment face a potential ‘compensation uplift’ following a change in law. A successful sexual harassment claim can now be 25% more expensive if the tribunal finds the employer failed the “preventative duty.”
The Worker Protection (Amendment of Equality Act 2010) Act 2023 came into effect in October 2024 and represents a shift from being reactive to proactively preventing sexual harassment. The new legislation states that:
Employers must take reasonable steps to prevent sexual harassment of their workers, including by third parties.
This means that if a sexual harassment claim is successful, the Tribunal must look at whether the employer took “reasonable steps” to prevent it. If the employer failed, it may order the respondent to pay a compensation uplift of up to 25% in addition to the compensation amount.
What reasonable steps should employers take to prevent sexual harassment?
Under the Worker Protection Act 2023, an employer is no longer just responsible for punishing a harasser. Now, they are legally required to have a system that prevents the harassment from happening in the first place, making “reasonable steps” an objective legal requirement.
EHRC’s updated technical guidance emphasises that how an employer handles a complaint is a direct reflection of their preventative culture.
While this creates a financial case for employers to prevent sexual harassment, that clearly shouldn’t be the main reason behind taking action. Creating a culture where sexual harassment is understood to be unacceptable should be a priority for HR teams.
“Sexual harassment continues to be widespread and often under-reported. Everyone has a right to feel safe and supported at work.
We will be monitoring compliance with the new duty and will not hesitate to take enforcement action where necessary.”
– Baroness Kishwer Falkner, Chairwoman of the Equality and Human Rights Commission
There are a number of steps employers can take in this regard including developing policies and procedures, providing training to staff and creating a culture where employees feel they can raise concerns without fear of reprisal.
What steps can employers take to reduce the chances of a 25% uplift?
The updated guidance from EHRC helps employers to understand their obligations and how to demonstrate that reasonable steps have been taken:
- Review and update anti-harassment policies
- Distinguish sexual harassment from other types
- State what the law expects and how disciplinary action can be taken
- Define sexual harassment in the context of your organisation
- Provide a complaints procedure
- Address third-party harassment
- Conduct a specific sexual harassment risk assessment
- Identify factors which might increase the likelihood of sexual harassment occurring
- Consider the steps which can be taken to reduce these factors
- Audit the reporting culture
- Consider a reporting system which allows staff speak up
- Keep confidential records
- Training
- Ensure investigators are trained in the new legal standards
- Train all staff on how to identify and report complaints of harassment
- Dealing with a harassment complaint
- Act immediately
- Respect confidentiality
- Provide protection to victims and witnesses during the investigation or complaint
- Only use confidentiality agreements where it is lawful
- Communicate the outcome and appeals process to the complainant in a timely manner
As an employer it is your duty to ensure all workers know the sexual harassment policy, how to report instances of it, and the consequences of breaching it. Ongoing engagement of staff is vital (such as 1-2-1s and staff surveys) to help identify where issues lie and to monitor the impact of any steps which have been put in place.
How do investigations help employers show they are taking reasonable steps?
Another way for employers to prove they are taking reasonable steps to prevent sexual harassment is through investigations. In the eyes of the law, an investigation is no longer simply a response to a grievance, it is a test of an organisation’s preventative duty as it helps to show there is a process in place.
As experienced workplace investigators, we understand the importance of learning lessons to avoid recurrence of an incident. An employer’s duty to take reasonable steps doesn’t end when a complaint is made, it includes taking steps to ensure it doesn’t happen again.
Investigations into harassment help address cultural issues, and act as a diagnostic tool for wider organisational health. This is important as the EHRC now requires risk assessments and evidence of culture change.
Investigating third-party customers and clients
The new duty explicitly includes preventing harassment from third parties (such as clients and contractors) and states it should be treated as seriously as that by a colleague. For employers to show they took steps to protect staff from clients and the public requires a more sophisticated investigative approach than traditional internal grievances.
Internal HR teams often find it awkward to investigate high-value clients due to their sensitivity and potential conflicts of interest. An objective independent investigation with extensive HR expertise means that issues are resolved rapidly and effectively by an impartial team with specialist knowledge of workplace culture.
When should an external investigation be used?
An impartial investigation can make the difference between a ‘failure of duty’ and a proven commitment to workplace safety. It acts as evidence of a robust and impartial culture, by proving the employer is willing to invite external scrutiny to get to the truth, which is a powerful defense against the “failure of duty” uplift.
Sometimes an internal investigation is sufficient, but it can be vulnerable to claims of bias, not disclosing certain facts, or lack of expertise, training or resource, which may lead a Tribunal to rule that the steps taken weren’t actually “reasonable”.
Additionally, a standard HR investigation may simply attempt to find out how an issue occurred, whereas a professional investigation focused on learning from mistakes and preventing recurrence, identifies how the culture allowed a situation to happen. This enables preventative measures to be put in place, which is exactly what the EHRC expects.
The law now requires employers to anticipate risks which means an investigation should look at systemic failures such as power imbalances or lone working, rather than just individual misconduct. An impartial investigation can help with this and ensure an incident doesn’t happen again.
Summary
The law has changed, and the reactive approach is now a legal and financial liability, as well as a failure of an employer’s duty of care toward the safety and wellbeing of their workforce. Taking reasonable steps to prevent sexual harassment and ensuring that your investigation process meets the new statutory standards is vital for a healthy workplace culture, and to avoid financial and reputational damage.
At Verita, we carry out objective investigations of harassment in the workplace, and provide culture assessments and workplace investigation training to help organisations develop a culture where employees feel safe and supported.
If you need assistance with a workplace investigation, culture improvement or would like to know more about our training courses, please book a free consultation, or if you prefer, use our contact form, or contact Ed Marsden on 020 7494 5670 or [email protected].
