From November 2026, employers can be held legally responsible for harassment suffered by employees at the hands of customers, clients, contractors, suppliers, service users and members of the public.
Section 21 of the Employment Rights Act 2025 inserts new subsections (1A) to (1C) into section 40 of the Equality Act 2010, creating a new obligation on employers to take all reasonable steps to prevent third-party harassment.
This represents a significant shift in workplace protection and places a greater emphasis on prevention, training, reporting procedures and effective management action.
Employers now liable for third-party harassment
Under the new legislation, employers may be liable where:
- An employee experiences harassment during the course of their employment.
- The harassment is committed by a third party.
- The employer failed to take all reasonable steps to prevent the harassment.
The new provisions strengthen employee protections and require employers to take a proactive approach to preventing workplace harassment.
Failure to comply could result in:
- Employment Tribunal claims
- Compensation awards
- Increased financial penalties
- Reputational damage
- Reduced employee trust and retention
What Is Third-Party Harassment?
Third-party harassment occurs when an employee is subjected to unwanted conduct by someone who is not employed by their employer.
Examples of third parties include:
- Customers
- Clients
- Contractors
- Agency workers
- Suppliers
- Patients
- Service users
- Visitors
- Members of the public
The law applies regardless of how the conduct occurs, including:
- In person
- Over the telephone
- By email
- Through social media
- Via online messaging platforms
- During work-related events
Examples of third-party harassment
Retail sector
A customer makes racist comments towards a shop assistant.
Healthcare
A patient repeatedly mocks a healthcare worker’s disability or religion.
Hospitality
A guest directs unwanted sexual comments towards bar staff or hotel employees.
Professional services
A client makes derogatory remarks about an employee’s ethnicity, age or sexual orientation.
Education
A parent verbally abuses a teacher using discriminatory language.
In each of these situations, an employer may face liability if they fail to take appropriate preventative action.
What does “all reasonable steps” mean?
One of the most important aspects of the legislation is the requirement for employers to take all reasonable steps to prevent harassment.
Employers cannot simply rely on:
- An outdated equality policy
- Generic training delivered years ago
- A complaints process employees do not understand
- A reactive approach once harassment has already occurred
Instead, organisations must be able to demonstrate a genuine and ongoing commitment to preventing harassment before incidents arise.
How Employment Tribunals may assess compliance
When considering whether an employer has met its obligations, Employment Tribunals are likely to examine:
- Whether anti-harassment policies are up to date and effective
- The quality and frequency of staff training
- Whether managers understand their responsibilities
- How previous complaints were handled
- Whether warning signs were ignored
- Whether action was taken against offending third parties
- Whether workplace harassment risks are regularly assessed
Where employers fail to take preventative action, tribunals may conclude that reasonable steps were not taken.
Increased risks for sexual harassment claims
The financial consequences can be particularly significant where sexual harassment is involved.
Where:
- An employee successfully brings a sexual harassment claim; and
- The employer is found to have breached its preventative duties,
an Employment Tribunal may increase compensation by up to 25%.
This means employers may face liability not only for the underlying harassment but also for enhanced compensation awards.
Industries most at risk
Although the law applies to all employers, some sectors face greater exposure because employees frequently interact with customers and members of the public.
Higher-risk sectors include:
- Retail
- Hospitality
- Healthcare
- Social care
- Education
- Property and housing
- Transport and logistics
- Call centres
- Professional services
- Leisure and entertainment
Businesses operating within these sectors should prioritise a review of their policies, training and reporting procedures.
Five steps employers should take immediately
1. Conduct a Workplace Risk Assessment
Identify where employees interact with third parties and assess particular risks, including:
- Lone working
- Customer-facing roles
- Late-night shifts
- Alcohol-related environments
- Client visits
- Remote and online communications
2. Update anti-harassment policies
Ensure workplace policies specifically address harassment by customers, clients and other third parties.
Policies should clearly explain:
- What constitutes harassment
- How concerns can be reported
- How complaints will be investigated
- What action may be taken against offenders
3. Train employees and managers
Regular training should ensure that both managers and employees understand their responsibilities.
Managers should know:
- Their legal obligations
- How to respond to complaints
- When concerns should be escalated
- How to support affected employees
Employees should understand:
- How to report incidents
- What support is available
- What action the employer may take
4. Investigate Every Complaint
All complaints should be:
- Recorded
- Investigated
- Followed up promptly
Failure to investigate concerns thoroughly can significantly weaken an employer’s defence in tribunal proceedings.
5. Take decisive action
Where appropriate, employers should be prepared to:
- Issue warnings
- Remove individuals from premises
- Restrict client access
- Reassign contracts
- Ban persistent offenders
Taking meaningful action demonstrates a commitment to employee protection and may help establish that reasonable steps were taken.
Why this matters
The introduction of third-party harassment liability is one of the most significant workplace compliance developments in recent years.
Employers are no longer expected simply to react once harassment occurs. They are expected to:
- Anticipate risks
- Implement preventative measures
- Train staff effectively
- Maintain robust reporting procedures
- Act decisively when concerns arise
Organisations that fail to meet these obligations may face substantial legal, financial and reputational consequences. By taking proactive steps now, employers can better protect their workforce, strengthen workplace culture and reduce the risk of costly Employment Tribunal claims.
Image used under CC courtesy of Ivan Radic
