Third-party harassment: What employers need to know in 2025
Review the history of third-party harassment law, the current position and the expected changes under the Goverment’s Employment Rights Bill.
Published: 5 February 2025 | Tina Elliott
Following significant changes in autumn 2024, the Government’s Employment Rights Bill now promises further reforms to the harassment laws, including the introduction of explicit new third-party harassment liability. Employment judge Tina Elliott looks at the history of third-party harassment law, the current position and the changes on the horizon.
What is third-party harassment?
Third-party harassment takes place when an employee is harassed at work by someone who is not a co-worker. The scope is wide and includes clients and customers, contractors, patients or visitors in the healthcare sector and guests in the hotel or hospitality sector. In those circumstances the employer does not have liability for the acts of the alleged harasser, as they may have with a co-worker.
The background
Prior to the Equality Act 2010, one of the more high-profile cases of third-party harassment was Burton and Rhule v De Vere Hotels [1996] IRLR 596, sometimes known as the “Bernard Manning case”. The comedian Bernard Manning had been booked to perform at a hotel. His act included the use of racist terminology which was offensive in particular to two black employees working at the event. The Employment Appeal Tribunal (EAT) held that the hotel was liable to those employees because it had not done enough to protect them from harassment, which was found to be sufficiently within their control.
When the Equality Act 2010 came into force, it included liability for third-party harassment if certain conditions were met. However, in October 2013 the relevant parts of the Act were repealed by the Coalition Government, which took the view that they carried employer liability too far. Plans in 2022 to reintroduce liability for third-party harassment did not make their way into legislation.
The current position
On 26 October 2024, an amendment was made to the Equality Act. This states that an employer must take reasonable steps to prevent sexual harassment of its employees in the course of their employment. It is an “anticipatory duty” designed to “transform workplace cultures”, according to the guidance issued by the Equality and Human Rights Commission (EHRC).
The duty is limited in its application. Although it applies to third-party harassment, it is only to sexual harassment and not to harassment related to other protected characteristics such as race, disability or religion.
A further limitation is that employees do not have the right to bring an individual employment tribunal claim for breach of this preventative duty. Enforcement action can only be taken by the EHRC, so a complaint would need to be made to it in the first place.
What other claims could arise?
In September 2024, the EHRC published its updated Sexual harassment and harassment at work: Technical guidance. This covers harassment by third parties and explains that although there is currently no employer liability for third-party harassment, other claims might arise if there is a failure to take action.
These risks include:
Direct discrimination
Take an example from the casino sector where a patron might request that they be given a dealer who is white and female. If the employer accedes to that request and asks a black female dealer who was due to come on shift to stay in the staffroom, this could result in a finding of direct race discrimination.
Indirect discrimination
The EHRC guidance gives the example of a hotel worker who complains she has been sexual harassed by a customer. The employer refuses to take action because, they say, “the customer comes first”. Even though the employer would have done the same if the complainant had been a man, the statistics show that women are more likely than men to be sexually harassed at work. This means that women are placed at a particular disadvantage, so it is unlikely that the hotel would be able to show that it had a justification for its practice of taking no action.
Associative indirect discrimination
Since 1 January 2024, employees can also bring a complaint of “same disadvantage” indirect discrimination, sometimes called associative discrimination. In the hotel example given above, a male worker who had been sexually harassed could argue that he suffered the same disadvantage as a woman as a result of the employer’s inaction.
Constructive unfair dismissal
There is a risk that a failure to take action as a result of third-party harassment could amount to a breach of the implied contractual term of trust and confidence and result in the employee resigning and claiming constructive dismissal.
Uplift in compensation
If a tribunal finds that there has been a breach of the duty to take reasonable steps to prevent sexual harassment in the course of employment, compensation may be uplifted by up to 25%.
Future changes
The Employment Rights Bill was introduced into Parliament in October 2024. It contains two significant changes in relation to third-party harassment. The first is to amend the Equality Act so that the duty to prevent sexual harassment will require employers to take “all reasonable steps”, rather than just “reasonable steps”.
The second is more substantial. This is to reintroduce employer liability for third-party harassment so that there will be a statutory duty on an employer not to permit a third party to harass an employee, plus a duty to take all reasonable steps to prevent it. This is likely to cover harassment related to age, disability, gender reassignment, race, religion or belief, sex and sexual orientation.
The Government expects that most of the reforms in the Employment Rights Bill will take effect no earlier than 2026, to give businesses time to prepare.
What should employers do?
Risks remain if employers fail to take action on complaints about discriminatory action by third parties, even before the changes envisaged in the Employment Rights Bill come into force. The steps that need to be taken will be sector-specific and include:
- Carrying out a risk assessment of third-party harassment in your sector.
- Training staff in how to deal with incidents of third-party harassment with plans for periodic refresher training.
- Updating policies and procedures, including how to report third-party harassment.
- Reviewing contracts with contractors and suppliers who come into contact with your staff, to prohibit third-party harassment.
- Placing notices in the workplace on the standards of behaviour expected from customers or clients.
- Ensuring that complaints of third-party harassment are addressed promptly.
- The EHRC has published an eight-step guide to preventing sexual harassment at work which employers may find helpful in considering the action they need to take.
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About the author
Tina Elliott
Tina Elliott has been a solicitor for over 20 years and specialises in employment law. In the last few years Tina has concentrated on advising clients involved in healthcare in both the public and private sector.