In brief
- Third party harassment is one of the most significant changes introduced by the Employment Rights Act 2025 ("ERA 2025"). It comes into force in October this year, and the liability can be significant. In this article, we suggest ways in which employers can prepare themselves for it.
- In addition to introducing liability for the acts of third parties, the ERA 2025 also strengthens workplace protection against harassment, including sexual harassment, in two other ways:
- From April 2026, disclosures related to sexual harassment automatically qualify for whistleblower protection where the worker reasonably believes the disclosure tends to show that sexual harassment has occurred, is occurring, or is likely to occur; and
- from October 2026, the proactive duty on employers to take "reasonable steps" to prevent sexual harassment will be raised to require "all reasonable steps".
Whistleblower protection for sexual harassment disclosures
On 6 April 2026, the ERA 2025 amended the definition of a "qualifying disclosure" to expressly include disclosures that sexual harassment has occurred, is occurring, or is likely to occur.
To some extent, it is hard to see why this provision will add much of significance to the legal landscape. Such disclosures were arguably already capable of qualifying under the pre-April regime (whether by way as a breach of a legal obligation or a health and safety concern), and a worker who suffers dismissal or detriment as a result can bring a victimisation claim under the Equality Act 2010 ("EA 2010"). However, the change does provide greater certainty for those thinking of raising concerns.
Perhaps the most important practical consequence will be that workers will be able to claim 'interim relief' if they are dismissed because they blew the whistle on sexual harassment. While it is very difficult to succeed in an application for interim relief (the bar for success is high as the Tribunal must be satisfied, before hearing all of the evidence, that the claimant will be likely to succeed at trial), it does in theory entitle the worker to continue receiving pay throughout the period leading to the tribunal hearing – even if they do not win the eventual claim. Given the significant delays in the Tribunal system, this could be significant.
What is the new requirement to take "all reasonable steps" to prevent sexual harassment?
From October 2026, the ERA 2025 will raise the standard of the proactive duty to prevent sexual harassment from "reasonable steps" to "all reasonable steps", bringing it in line with the existing statutory defence under section 109(4) of the EA 2010 against vicarious liability for discrimination committed by employees.
What constitutes “all” reasonable steps is undefined, and concerns have been raised that it will be a difficult standard to meet. During the passage of the Employment Rights Bill, the Employment Lawyers Association observed in its response to the Public Bill Committee Call for evidence on the Employment Rights Bill that the “all reasonable steps” defence under s.109(4) EA 2010 is rarely invoked because it rarely succeeds, and warned that importing this standard into the proactive duty risks imposing something approaching strict liability on employers. The government has the power to specify in Regulations what steps will satisfy the duty, though those Regulations are not expected until 2027/28 (in other words, at least a year after the duty has come into force).
That said, some commentators are not convinced that this change to the law will actually make much difference in practice. It would be a bold employer who suggests that they escaped liability for failing in their duty to prevent sexual harassment because they took one step to combat it, when (say) three other obvious steps were also open to them but were ignored.
Where does this leave employers? Satisfying the standard in practice will depend on the specific circumstances of each employer including their size, sector, resources and working environment and courts are likely to take a fact-sensitive, contextual approach. Employers should have already conducted a proper risk assessment in accordance with the EHRC's existing technical guidance and will have identified what steps should be taken to address the risks that are identified. Provided employers do this, they should be relatively well placed to answer any claim.
In the meantime, a breach of the proactive duty already carries the risk of a compensation uplift of up to 25% in any related tribunal proceedings, a significant commercial incentive to take proactive steps now rather than await regulatory guidance.
Employers' liability for third party harassment
While the first two changes described above should not, in our view, create much in the way of additional burdens for employers, from October 2026, the ERA 2025 will impose liability on employers who fail to take "all reasonable steps" to prevent third parties from harassing their employees in the course of their employment. In other words, an employer will be held liable for the actions of a third party in very much the same way as it would be liable for the actions of one of its own employees.
Third-party liability is not completely new. For a period until 2013, the law imposed liability under a "three strikes" rule, requiring at least two prior incidents of which the employer was aware, before liability would attach. The ERA 2025 reintroduces third-party liability without an incident threshold. The only way of avoiding this liability is for the employer to show that it had taken "all reasonable steps" to prevent the harassment.
"Third parties" will mean a person other than the employer or one of its employees. The category is therefore broad, extending beyond the obvious examples of customers, clients and suppliers to include members of the public, delivery drivers, visitors, contractors and even those who share an office building or workspace, such as co-tenants.
Significantly, this duty also extends to harassment related to all relevant protected characteristics (e.g. race, religion and sexual orientation) under the EA 2010, not just sexual harassment.
This will prove particularly challenging for employers in customer-facing sectors such as retail, hospitality and professional services, as well as other sectors where staff regularly interact with third parties over whom employers have limited control.
How should employers prepare for the introduction of third party harassment?
Employers will need to be proactive to ensure that they are in the best position to prevent and, if necessary, defend claims. Relevant steps include the following.
- Ensuring that the 'tone from the top' is clear. Senior leadership engagement with measures that employers implement will be helpful in ensuring compliance. Reports to the board on complaints data and buy-in for staff training and sponsorship of any new policy by a senior officer will all contribute to an anti-harassment culture.
- Carrying out risk assessments to identify the contexts in which employees may be exposed to harassment, including by third parties, and the steps needed to mitigate those risks.
- Reviewing and updating harassment, whistleblowing, and grievance policies to reflect the new standards.
- Reviewing lone working and remote working arrangements, as third party harassment risks may be harder to detect and respond to in these situations.
- Providing staff training so that employees can identify and report harassment, including by third parties, and managers are equipped to respond appropriately, with training refreshed periodically.
- Strengthening reporting channels to ensure they are accessible, confidential, and cover third-party incidents as well as internal complaints, and ensuring employees are aware of the applicable whistleblowing protections.
- Considering anti-harassment signage, and establishing clear procedures for managing or excluding third parties who harass employees.
- Reviewing contracts and terms of business with third parties to include express provisions dealing with harassment by the counterparty's employees or agents, which include the ability to terminate the agreement for cause if the conduct is sufficiently serious or persistent.
- Keeping records of risk assessments, policy reviews, and training.
Further guidance on preparing for the upcoming changes can be found on our ERA Hub.
How can Mishcon de Reya help?
Our Employment team has extensive experience advising on complex workplace issues, including harassment and whistleblowing. We can help you to conduct risk assessments, review and update policies and procedures, and design and provide tailored training programmes. If you would like to discuss what the ERA 2025 changes mean for your organisation, please contact a member of the Employment team.