Harassment in the Workplace - Prevention, Compliance & the New Employer Duty

What Is Harassment?

Most employers have a broad sense of what harassment looks like — the manager who makes unwanted comments about a colleague's religion, the client who repeatedly touches a member of staff uninvited, the group WhatsApp full of jokes at someone's expense. But the legal definition matters. Getting it wrong can mean the difference between a defensible position at tribunal and an unlimited compensation award.

Under section 26 of the Equality Act 2010, harassment occurs where a person engages in unwanted conduct related to a relevant protected characteristic, and that conduct has the purpose or effect of violating another person's dignity, or creating an intimidating, hostile, degrading, humiliating or offensive environment for that person.

The Three-Part Test - Harassment in the Workplace

To establish harassment under s.26, three questions must be answered — and all three matter:

• Is the conduct unwanted? The test is whether the recipient considers it unwanted — not whether the person doing it intended it to be welcome. Someone who laughs along at a joke to avoid embarrassment hasn't consented to it.
• Is it related to a protected characteristic? The conduct doesn't have to be directed at the person because of their characteristic. A racist joke told in a meeting can still constitute harassment of a Black employee who overhears it, even if it wasn't aimed at them personally.
• Does it violate dignity or create a hostile environment? The tribunal looks at this from the perspective of the individual, not an objective bystander. A single incident can be sufficient — especially where it involves sexual conduct or overtly offensive language.

The Protected Characteristics in Regards to Harassment

Harassment claims under s.26 can arise in relation to nine protected characteristics: age, disability, gender reassignment, race, religion or belief, sex, and sexual orientation. Marriage and civil partnership and pregnancy and maternity are not covered by s.26 (though related conduct may still give rise to other discrimination claims). Sexual harassment has its own specific rules — covered in section 3 of this guide.

Purpose vs. Effect

One aspect of the legal test that catches employers out is the distinction between purpose and effect. Conduct constitutes harassment if it either was intended to violate dignity or create a hostile environment, OR had that effect in practice even if no offence was meant.

That said, tribunals don't apply a purely subjective test on the 'effect' limb. When assessing whether conduct had the relevant effect, the Employment Tribunal must take into account the perception of the claimant, the other circumstances of the case, and whether it is reasonable for the conduct to have had that effect. So an unusually sensitive reaction to objectively innocuous conduct won't necessarily succeed — but don't count on that as a defence without taking advice first.

KEY CASE: Reed v BOOZER (2000)
In Reed and Bull Information Systems Ltd v Stedman, the EAT confirmed that the unwanted nature of conduct should be assessed from the recipient's perspective, not the respondent's. Employers shouldn't assume that what seems like banter to one person is banter to everyone.

The New Harassment Preventative Duty in the Workplace

Before October 2024, employers faced liability for harassment that occurred — but there was no free-standing legal obligation to actively prevent it. That changed.
The Worker Protection (Amendment of Equality Act 2010) Act 2023 introduced a new s.40A into the Equality Act, which came into force on 26 October 2024. It places a proactive duty on employers to take "reasonable steps" to prevent sexual harassment of their workers.

NEW LEGAL DUTY — IN FORCE NOW

• The preventative duty under s.40A applies to ALL employers, regardless of size.
• You must take reasonable steps to prevent sexual harassment before it happens — not just
respond to complaints after the fact.
• The Equality and Human Rights Commission (EHRC) can investigate and enforce this duty directly, without a tribunal claim being brought.
• Where a worker wins a sexual harassment claim and the tribunal finds the employer breached the preventative duty, compensation can be increased by up to 25%.

What Are 'Reasonable Steps' in Relation to Harassment?

The Act deliberately uses "reasonable steps" rather than "all reasonable steps" — recognising that what's reasonable for a 500-person business won't be the same for a five-person firm. The EHRC's technical guidance sets out factors that are relevant: the size and resources of the organisation, the nature of the sector, the working environment, and whether certain roles or settings carry a higher risk of harassment.
In practice, tribunals and the EHRC will look for evidence that you have assessed the risk of sexual harassment in your workplace, taken steps proportionate to that risk, and put those steps in place before any incident occurred. A policy that sits in a drawer and was never communicated to staff is worth very little.

Employment Rights Act 2025 - Harassment Law Changes

The current duty is significant  but it's going to get stronger. The Employment Rights Act 2025 is expected to amend the Equality Act to replace "reasonable steps" with "all reasonable steps" — a higher standard. Employers will need to demonstrate not just that they took some steps, but that they identified and implemented every reasonable preventative measure available to them.

The ERA 2025 will also reinstate employer liability for third-party harassment — something that was  removed when the Equality Act 2010 repealed the relevant provisions of the Sex Discrimination Act 1975. This is covered in section 4. The new third-party provisions are expected to come into force in October 2026.

PREPARE NOW

If your business doesn't yet have a sexual harassment risk assessment, a standalone harassment  policy, and documented staff training, you're already behind. With the 'all reasonable steps'  standard coming, the gap will only widen. Use the framework in section 5 to start building your evidence trail.

Sexual Harassment

Sexual harassment is defined separately under s.26(2) of the Equality Act 2010 and carries particular  weight because of the preventative duty now attached to it. It covers unwanted conduct of a sexual nature that has the purpose or effect of violating a person's dignity, or creating an intimidating, hostile, degrading, humiliating or offensive environment.

There's a second, distinct form under s.26(3): less favourable treatment because someone has rejected, or submitted to, conduct of a sexual nature. So if an employee is passed over for promotion because they refused a manager's advances, that's also sexual harassment — even if the underlying conduct didn't itself cross the line.

What Counts as Sexual Conduct in the Workplace?

The range is wider than many employers assume. Relevant conduct includes:
• Physical contact — touching, grabbing, or brushing against someone in a sexual way
• Verbal conduct — sexual comments, innuendo, requests for dates, discussing someone's body, sexual 'jokes'
• Non-verbal conduct — wolf-whistling, leering, displaying pornographic or sexually explicit material
• Digital conduct — sending sexually explicit messages, images or videos via email, Teams, WhatsApp or any other channel

Power Dynamics and the Workplace Reality

Sexual harassment rarely occurs between equals with equal power. The most common pattern involves  a person in a position of authority — a manager, director, senior partner — and someone junior who depends on them for references, promotions or simply a liveable working environment. This matters for two reasons.

First, it affects reporting. Employees in junior positions are far less likely to make a formal complaint —  particularly if the person they'd need to report to is the person harassing them, or a friend of that person. Many will simply leave, which is why unexplained attrition in certain teams can be an early warning sign.

Second, it affects the employer's liability exposure. Where a manager commits harassment in the course  of their employment, the employer is vicariously liable unless the reasonable steps defence applies. The fact that the employer didn't know it was happening isn't, by itself, a defence.

SCENARIO

A regional sales manager regularly makes sexual comments to female colleagues during client events. No formal complaints are made — junior staff assume it's just 'how he is'. When one  employee eventually brings a tribunal claim, the employer cannot point to a complaint it ignored; it  must show what it did proactively to prevent this from happening. Without documented risk assessment, training, and clear reporting routes, the defence fails — and the 25% uplift applies.

Third-Party Harassment

Third-party harassment — where the harasser is a customer, client, patient, supplier or other person external to the business — has had a complicated legal history in the UK.

The original Equality Act 2010 included explicit provisions making employers liable for third-party  harassment where they knew it had occurred on at least two previous occasions and failed to take reasonable steps to prevent it (the so-called "three strikes" rule). Those provisions were repealed in 2013 under the Enterprise and Regulatory Reform Act. Since then, employees have had to rely on less direct legal routes, such as constructive dismissal or health and safety legislation.

The Return of Third-Party Liability - In the Workplace

SIGNIFICANT CHANGE COMING — OCTOBER 2026

• The Employment Rights Act 2025 is expected to reinstate employer liability for third-party
harassment as part of a package of reforms coming into force in October 2026.
• Under the new provisions, employers will be liable where they fail to take all reasonable steps to  prevent a third party from harassing their workers.
• The 'three strikes' limitation is not expected to return — a single incident of third-party harassment, if the employer failed to prevent it, may be sufficient.
• This will significantly affect hospitality, retail, healthcare, transport, and any sector where staff have regular contact with members of the public.

High-Risk Sectors and Environments

Any business where staff deal directly with the public or with clients faces a materially higher risk. The sectors most affected include:

• Hospitality and retail — bar and restaurant staff, shop workers, and receptionists are frequently subject to unwanted sexual comments or touching by customers. The problem is well documented and often normalised.

• Healthcare — nursing staff, care workers and paramedics face abuse from patients or relatives. The NHS has recognised this as a systemic issue.

PRACTICAL STEPS FOR THIRD-PARTY RISK

• Include third-party harassment explicitly in your harassment policy
• Train staff on what to do if harassed by a customer or client
• Empower managers to remove or refuse service to perpetrators
• Create a clear reporting route that doesn't require staff to raise it with the client relationship
manager (who may face a commercial conflict)
• Keep records of incidents, even where formal complaints aren't made
• Consider whether certain client contracts or relationships create unacceptable risk

Building a Sexual Harassment - Prevention Framework

The EHRC's technical guidance on the preventative duty identifies several categories of reasonable  steps. Taken together, these form the framework you need — and the evidence trail that will support your defence if a claim is brought.

Step 1: Harassment Risk Assessment

Start by identifying where harassment risk is highest in your organisation. Think about your physical environment (do staff work late, alone, or in isolated areas?), your workforce composition (are there  significant power imbalances?), your culture (are certain behaviours tolerated informally?), and your client-facing activities (are certain roles particularly exposed to third-party contact?).

Document the assessment. The moment a claim is brought, you want to be able to show that you sat down, identified the risks, and designed your response around them — not that you implemented a generic policy with no thought behind it.

Step 2: Policies on Harassment

Your harassment policy should be standalone — not buried on page 47 of the employee handbook. It needs to explain clearly what harassment is (using the legal definition), give real examples that are relevant to your sector, set out the reporting process, explain what happens to reports, and make clear what the consequences for harassment are. It should specifically address sexual harassment and third-party harassment.  Review the policy at least annually and whenever there is a change in legislation. The policy being up to
date at the time of an incident matters. So does whether employees actually know it exists — distribute it actively, not just on the intranet.

Step 3: Harassment Training

Training is one of the most powerful elements of the reasonable steps defence. Tribunals and the EHRC will look at whether training was provided, how recently, to whom, and whether it was substantive or just a tick-box exercise.

Training should be:

• Role-specific — managers need different content to general staff. Managers should understand how to respond to a complaint, not just what harassment is.
• Regular — one induction session five years ago won't cut it. Refresh at least every two years, or following any relevant legal change.
• Documented — keep records of who attended, when, and what the training covered.
• Interactive — passive e-learning modules are the weakest form. Scenario-based training that prompts discussion is far more effective and looks better in tribunal.

Step 4: Reporting Mechanisms for Harassment

People won't report harassment if the process feels unsafe or pointless. Your reporting route needs to offer genuine options — including a route that doesn't go through the direct line manager (since managers are often the respondents). Consider a confidential reporting option, a dedicated HR contact, or an anonymous reporting channel.

Make clear at every stage what happens to a report — who sees it, what the investigation process involves, and what protections exist against victimisation. Uncertainty is one of the main reasons people don't come forward.

Step 5: Culture and Leadership

Policies and training count for little if leadership behaviour contradicts them. Where senior figures are known to behave badly and nothing happens, staff notice — and the message is that the policy is performative. Conversely, visible senior commitment to a respectful workplace has a disproportionate effect on culture.

PREVENTION FRAMEWORK CHECKLIST

• Harassment risk assessment completed and documented
• Standalone harassment policy — reviewed within the last 12 months
• Policy explicitly addresses sexual harassment and third-party harassment
• Policy communicated to all staff (not just available on the intranet)
• Manager training on identifying, receiving and responding to complaints
• All-staff training on what harassment is and how to report it
• Training records maintained for all sessions
• Multiple, accessible reporting routes available
• Protection against victimisation clearly communicated
• Regular review of culture indicators — grievance rates, exit interview themes

Handling Complaints About Harassment 

How you respond to a harassment complaint matters almost as much as what happened in the first place. A poorly handled investigation — one that's slow, biased, or leaves the complainant feeling unsupported — will compound the original harm and dramatically weaken your legal position.

First Response

When a complaint is received, acknowledge it promptly. Don't dismiss it as trivial without investigation, even if your instinct is that it's a misunderstanding. Don't tell the complainant to "sort it out" directly with the respondent — that places an unfair burden on the victim and risks retaliation. And don't delay: a complaint left to stagnate for weeks signals to everyone watching that the process isn't serious.

Investigation

Investigations into harassment complaints should follow the same principles as any workplace
investigation — impartiality, thorough fact-finding, and a fair opportunity for both sides to put their case. The investigator should be independent of both the complainant and the respondent, and ideally have had some training in conducting sensitive investigations.

Gather evidence systematically: written statements from the complainant and respondent, witness accounts, and any documentary evidence such as emails, messages or CCTV footage. Keep an investigation file and record every step taken.

Where the alleged perpetrator is in a management position, consider whether interim measures are needed while the investigation is ongoing — such as redeployment, adjusted reporting lines, or in serious cases, suspension on full pay. Suspension is not a finding of guilt; it's a neutral act to protect the integrity of the process. Always take legal advice before suspending.

Confidentiality

Both parties are entitled to have the investigation handled discreetly. Stress to anyone interviewed that the contents of their interview are confidential and should not be discussed with colleagues. This doesn't mean you can promise absolute confidentiality to the complainant — there will be circumstances where some disclosure is unavoidable to conduct a fair investigation — but you can commit to limiting disclosure to those with a genuine need to know.

Supporting the Complainant

The experience of making a harassment complaint is, for most people, deeply uncomfortable. Keep the complainant informed of progress without disclosing confidential elements of the investigation. Signpost any employee assistance programme or counselling support available. Avoid any arrangement that feels like the complainant is being punished — for example, don't move them to a different shift or desk as an 'interim measure' if it disadvantages them.

Protecting Against Victimisation

Victimisation — treating someone less favourably because they have made or supported a complaint under the Equality Act — is itself unlawful under s.27 of the Act. Watch for subtle forms: exclusion from meetings, changes in workload or opportunities, hostile treatment from colleagues. These can give rise to separate claims, and the tribunal will view them seriously.

COMMON INVESTIGATION FAILURES

• Delay in acknowledging or commencing the investigation
• Using a manager who knows one or both parties as the investigator
• Failing to interview key witnesses
• Sharing too much information about the complaint with the wider team
• Taking action against the complainant (e.g. dismissal, demotion) while the complaint is live
• Closing an investigation as 'unsubstantiated' without proper analysis of the evidence

Employer Liability for Harassment

One of the most important features of harassment law for employers is that you can be held responsible for the acts of your employees — even if you didn't know about the harassment, didn't approve it, and would have stopped it had you been aware. This is vicarious liability.

Vicarious Liability Regarding Harassment

Under s.109 of the Equality Act 2010, anything done by an employee in the course of their employment is treated as done by the employer as well. 'In the course of employment' is interpreted broadly.
Harassment that occurs at a work social event, on a work trip, in a group chat used by colleagues, or even in informal interactions after hours can all fall within the scope of employment.

KEY CASE: BELLMAN v NORTHAMPTON RECRUITMENT (2018)

In this case, a sales director assaulted and harassed an employee at an unofficial post-party
gathering. The Court of Appeal held the employer vicariously liable because the director was
exercising authority derived from his seniority. The venue being informal didn't take it outside the course of employment.

The 'Reasonable Steps' Defence

Under s.109(4), an employer has a defence to vicarious liability if it can show that it took all reasonable steps to prevent the act of harassment from occurring. This is a demanding test — it's not enough to have a policy in place. The employer must demonstrate that the steps taken were actually capable of preventing the conduct, not just that they existed on paper.

The standard elements of the defence — policy, training, clear reporting routes — are necessary but not always sufficient. Tribunals also look at whether policies were actually enforced, whether previous complaints were taken seriously, and whether the culture created by management enabled harassment to persist.

Where harassment is committed by a director or business owner personally (rather than an employee), there is no vicarious liability in the traditional sense — the employer is the perpetrator. In those cases, there is no reasonable steps defence available.

Individual Liability

Employees who commit harassment can also be personally named as respondents in a tribunal claim under s.110 of the Equality Act. They can be ordered to pay compensation directly. This is relevant because it can increase the pressure on individuals to take allegations seriously — it isn't just the employer's problem.

Consequences of Getting an Harassment Claim Wrong

The consequences of a harassment claim — particularly a sexual harassment claim under the new regime — are substantial, and they go beyond the tribunal award itself.

Tribunal Awards: Injury to Feelings

Compensation for harassment is uncapped. Unlike unfair dismissal, where the compensatory award is capped at £115,115 (2026 figure), harassment awards can go much higher in serious cases. The main head of loss is injury to feelings, assessed by reference to the Vento bands (as updated by Presidential Guidance):

On top of injury to feelings, claimants can recover for psychiatric injury (which requires medical evidence but can be very significant), financial losses such as lost earnings if they felt forced to resign, and aggravated damages in cases of particularly high-handed conduct.

 The 25% Uplift on Harassment Claims

 

THE 25% UPLIFT - A SIGNIFICANT FINANCIAL RISK

Where a tribunal finds that an employer failed to comply with the preventative duty under s.40A, it must increase the compensation award by up to 25%. This uplift applies to the whole of the harassment compensation- not just the injury to feelings element. On an award in the middle Vento band, that could add over £8,000 to the bill. On a serious upper-band case, the additional liability runs to tens of thousands of pounds.

EHRC Enforcement

The Equality and Human Rights Commission has powers to investigate and enforce compliance with the preventative duty without waiting for an individual to bring a claim. It can issue compliance notices, require employers to prepare and submit action plans, and take enforcement action in the courts. The EHRC has already signalled that it takes the new duty seriously — several high-profile sectors are likely to receive attention.

Reputational Damage

Tribunal decisions are publicly accessible. A harassment judgment against your business will appear in search results, in legal databases, and potentially in press coverage — particularly where the facts are striking. The impact on recruitment, client relationships, and staff morale can be severe and long-lasting. For many businesses, the reputational cost of a public judgment dwarfs the financial award itself.

Getting harassment prevention right protects your people and your business. If you're not sure where your current procedures stand, the first step is a straightforward review — and that's exactly what we can help with.

Quick Reference: Key Legal Framework

Next Steps

If behaviour breaches policy, follow your disciplinary procedure

If complaints escalate, understand employment tribunal claims

If resolving issues privately, consider settlement agreements

View our Webinar on Third Party Harassment Risks in the Workplace