From 30 October 2026 an employer can be liable for the harassment of its employees by someone outside the organisation. Previously the duty was to show that some reasonable steps were taken. The new duty requires more. This means proactive steps and being able to show how those steps were taken, not a stale poster on the office wall or a policy no one takes any notice of.
The change in the law derives from section 21 of the Employment Rights Act 2025 which inserts three new subsections into section 40 of the Equality Act 2010 as follows:
(1A) An employer (A) must not permit a third party to harass a person (B) who is an employee of A.
(1B) For the purposes of subsection (1A), A permits a third party to harass B only if—
(a) the third party harasses B in the course of B’s employment by A, and
(b) A failed to take all reasonable steps to prevent the third party from doing so.
(1C) In this section “third party” means a person other than—
(a) A, or
(b) an employee of A.
If an employee is harassed by a third party during the course of employment and the employer fails to take all reasonable steps to prevent it, the employer may be liable. So, if a member of staff shares with you that a supplier, client or similar has made sexual advances or is making them feel uncomfortable with their innuendo you must not ignore it and hope it will go away. Of course it is to be hoped that the introduction of this law may have some deterrent effect on the perpetrators but only time will tell if that might be effective.
A third party is anyone other than the employer or another employee. It could be a customer or client, a patient, a service user, staff of a suppliers, a member of the public, anyone who comes into contact with an employee in the course of their work. Online harassment is covered by the new law as well as in person harassment. Think about how a third party might harass an employee via social media.
The new duty covers all forms of harassment that are protected by section 26 of the Equality Act 2010 -unwanted conduct – with the purpose or effect of violating dignity or creating an intimidating, hostile, degrading, humiliating or offensive environment. This also includes unwanted conduct of a sexual nature (s.26(2)). A patient who harasses a nurse on a ward would create liability for the NHS. A delivery driver delivering ingredients to a restaurant. A security guard outside an office building catcalling women on their way into the office. You get the drift.
An employer must show it took all reasonable steps to prevent the harassment if they are to avoid liability. This includes a step the employer should have taken even if it might not have prevented the harassment, Canniffe v East Riding of Yorkshire Council. Tribunals will apply the same test that they already apply to the vicarious liability defence under s109(4).
This is not a change to the legislation that any employer can afford to ignore.
While the ERA 2025 was going through Parliament there was a lot of debate about exceptions for overhead conversations or expressions of opinions. This has not been carved out of the new legislation and we expect to see test cases around this. For anyone working in hospitality venues this is likely to create some issues.
If a claim under the new legislation succeeds the Employment Tribunal can increase compensation by up to 25% if it is proven that the employer has breached its duty to prevent harassment under section 40A. For financial reasons and reasons of reputation employers would be wise to pay attention here.
At didlaw we routinely deal with matters connected to harassment at work, mores the pity, but we are here to provide support through the legal process and to find swift resolution where an employee has been harassed in the course of their employment.
