Robin Turnbull

Most employers are aware of the ‘headline’ provisions of the bill, like rights to claim unfair dismissal from day one and guaranteed hours. However, one of the less well-covered provisions is that of employer liability. This will make employers liable should staff be harassed in the course of their employment by a third party. And with large numbers of guests, contractors and suppliers coming and going from a premises every day, it could have a huge impact on guest-centric hospitality businesses.

Unfortunately, many employers aren’t well-versed in what ‘third party liability’ could mean for them – and just how costly a lack of understanding could be.

The law

Under the Equality Act 2010, employers are considered liable if a member of staff harasses a colleague in relation to a protected characteristic such as age, disability or race. The only defence available for an employer was to show it had taken ‘all reasonable steps’ to prevent the act from happening.

Sexual harassment is a slightly different case. Under an amendment to the act, from October 2024, employers have a duty to take ‘reasonable steps’ to prevent sexual harassment.

As it stands, workers cannot bring a tribunal claim against an employer for harassment by a third party. However, when the Employment Rights Bill comes into play, this will change.

Protections for workers will ramp up, with employers required to take anticipatory action to prevent employees being harassed by third parties while at work.

Previous (now repealed) laws around employer liability only came into play if an employee was harassed by a third party on two previous occasions – essentially a ‘three strikes’ approach.

The new provision focuses more on prevention, with the onus on employers to do everything in their power to prevent harassment from happening. And it doesn’t just apply to sexual harassment; it’s harassment in all forms.

Gaining clarity

There are two major grey areas regarding third party liability.

Firstly, there’s no clear definition of ‘all reasonable steps’, meaning tribunals will likely make any judgements depending on the circumstances of the claim presented.

Secondly, there is no test case for third-party liability at this scale. No set precedent means no barometer for how much these claims could cost businesses found liable by a tribunal. However, with the average cost of harassment cases sitting anywhere between £27,000 and £45,000, opening up to third party liability could prove costly for businesses unable to demonstrate the employer’s defence.

Finally, investigations into third party harassment will be carried out differently. Involved third parties will be under no obligation to input into the process, so employers may decide there isn’t enough evidence to say whether the harassment took place. But a tribunal could take a very different view should an employee bring a claim.

Taking action

Hospitality businesses should begin looking at the reasonable steps they can take now, with a view to implementing them sooner rather than later. Actions range from more obvious measures such as signage displayed in public, adding policies to public-facing websites, and ensuring clear and well-communicated procedures for reporting and escalating instances of third-party harassment.

Businesses should also consider implementing risk assessments, more detailed training for managers on spotting signs early and appropriate responses to third party harassment, and implementing wording into booking system T&Cs.

The bill might feel like it’s quite a while off, and businesses like hotels, restaurants and bars may be conscious of the delicate balance of being on the right side of the law without impacting the overall guest experience. However, the consequences of not being prepared should the worst happen, could be more costly – financially and reputationally – than anyone realises.

Robin Turnbull is a partner at Anderson Strathern