It’s the season again – many Christmas events are in the planning, and most will involve alcohol…nothing wrong with that but the lines between the professional and the personal are often blurred creating a risk for employers. More of a risk this year with the advent of the new duty on employers to take reasonable steps to prevent sexual harassment – from other employees and from third parties.

Recent legal changes have now increased the risk that employers will end up in a costly employment tribunal if bad behaviour occurs.

New sexual harassment law

The Worker Protection Act 2023 came into place on the 26th of October 2024 and states that employers have a duty to take preventative action against sexual harassment.

What this means in practice is that you need to conduct a proper risk assessment around sexual harassment towards your staff and your broader worker base because:

• employers must now take ‘reasonable steps’ to prevent sexual harassment of employees
• and this should extend to preventing harassment from third parties, including customers, clients and contractors

What this means

The new sexual harassment law does not mean that employers are legally responsible for every instance of sexual harassment in the workplace or at company events. But if the worst happens and you haven’t taken preventative measures, there’s a good chance you will be facing up to a further 25% uplift on any awards made at an employment tribunal.

It is impossible to definitively eliminate the possibility of sexual harassment taking place, and this is not what employers are expected to do. They are, however, required to take steps that are reasonable to prevent sexual harassment. What those steps amount to is objective and must be considered case by case. Factors such as the time, cost and potential disruption caused by taking the steps will be relevant when considering their reasonableness. Other factors such as an employer’s size, resources and the nature of the workplace are also relevant considerations.

Who may be responsible for bad behaviour at company events?

The new law extends a pre-existing legal principle known as ‘vicarious liability’, meaning employers may be liable for acts of discrimination, violence and sexual harassment in the workplace committed by their employees or by third parties – if preventative measures haven’t been taken.

Crucially, this includes events outside of the office, including Christmas parties.

Here are a few examples of tribunal decisions made after sexual or physical misconduct at a festive event that illustrate the reach of vicarious liability:

• an employer was held liable after a manager sexually harassed and assaulted a colleague after the company Christmas party. This was despite the fact that the assault took place after the party, at a different location

• further, an employee successful sued its employer after the Christmas party even though the incident (an assault) occurred after both parties had travelled to a hotel after the party.

• however, an employer was held not liable for an employee being injured at a Christmas party because the employer had carried out risk assessments and taken preventive measures like hiring extra security guards.

These examples show that employers can absolutely be liable when things go wrong and this even extends to events that happen after the party has ended. However, tribunals will clearly take note of measures taken by an employer to keep their teams safe.

The importance of the risk assessment in complying with the new law

Vicarious liability is nothing new: The examples in the last section all occurred before the new sexual harassment legislation came into effect. However, now employers have an even higher legal hurdle to clear.

The duty on businesses is to anticipate scenarios when workers might be subjected to sexual harassment and take reasonable action to prevent it from taking place. At the heart of this duty is a requirement for employers to effectively assess risk.

Risk assessments help identify potential harassment issues and areas of risk within the work environment. Methods include anonymous staff surveys, organisational reviews and examining historical issues. Preventing harassment is a shared responsibility across the workforce, and educating workers about acceptable behaviour is crucial in effective risk management. The main ways that employers can educate their workforce is through their policies, training and culture:

• policies: employers must have clear, comprehensive policies outlining their stance on sexual harassment. These policies should provide guidance on identifying harassment, reporting mechanisms, consequences for perpetrators and protections for those who report in good faith.
• training: tailored training is essential for compliance. Generic ‘box ticking’ harassment training is unlikely to be sufficient. Organisations should seek to provide bespoke training that is tailored and addresses industry-specific scenarios and challenges that their workers may encounter during the course of their employment. Managers and senior staff, who have greater responsibilities, may require additional training focused on risk identification.
• culture: a culture that actively combats harassment is vital. Employers should encourage reporting and demonstrate a commitment to ongoing risk assessment and review of practices, policies and training. Regular assessments indicate a proactive approach to preventing harassment.

With respect to the forthcoming Christmas party here are some important steps to help protect your employees and demonstrate compliance:

1. Risk assessment: as said, it is important to proactively identify the risk of sexual harassment at such events and take steps to mitigate it. This can include limiting the amount of alcohol on offer, not paying for after-parties, providing guidance beforehand – or any of the other policies on this list.

2. Employee and manager training: all employees need to be aware of the new sexual harassment law and be clear that their behaviour will reflect on the company. Managers should know how they should respond when issues are reported.

3. Educate clients, contractors and customers: ensure all pre-party comms are extended to clients, contractors and customers wherever possible. You could also consider putting up signs around the party venue.

4. Pre-party comms: it is also helpful to remind participants that sexual harassment is not acceptable and encourage anybody who experiences it to report it to managers. If possible, this should include clients and contractors.

Handling complaints of harassment

When harassment reports are made, they must be investigated and addressed robustly according to company policies. Failure to do so can create an environment where harassment is not taken seriously, empowering perpetrators.

The future

The new duty has raised the bar for employers, and future legal requirements may be even stricter. The Employment Rights Bill introduced by the government on 10 October 2024 has indicated that businesses will likely need to take all reasonable steps to prevent harassment in the future to prevent harassment. The bill also confirms that employers may face liability for standalone third-party sexual harassment claims from their workers. With the bar of expectation on employers growing ever higher it will be interesting to see whether festive parties or any form of out of work engagement will be encouraged in the future.

Any questions nicola.goodridge@goodhr.co.uk or call +44 7917 878384

Firstly, it is important to be clear that the intended employment reforms are not set to come into force until 2026. Many of my clients are contacting me saying they have been approached by organisations offering to update their documentation in light of the new reforms. However, it is important to note the following:

1. they are not yet in force.
2. they will not be in force until, probably, 2026.
3. we don’t yet know the exact detail of the reforms.

Now that the Bill has been published, it will be subject to the usual Parliamentary process with debates and amendments put forward in both the Lords and the Commons before the Bill is granted Royal Assent and becomes law.

In addition, it will require a substantial amount of consultation over the details of the secondary legislation required to implement the Bill’s provisions. This will all take time, hence the government’s confirmation that the majority of the changes will not take place before 2026.

However, it is sensible for employers to be aware of the broad remit of the changes that are due to become law. Therefore, below are the key headline changes introduced under the Bill:

1. Day-one rights

The Bill introduces ‘day one’ rights for employees to claim unfair dismissal rather than the current two- year period. This will subject to a statutory probationary period (an ‘initial period of employment’) for new hires during which time employers will be able to terminate employment without following a full process. Details of how this will work will be set out in separate Regulations and the length of the probationary period will be consulted over, but the Government is currently proposing a period of nine months.

The Bill also introduces day one rights to paternity leave, unpaid parental leave and a new statutory (paid) bereavement leave, based on the existing statutory right to two weeks’ parental bereavement leave.

2. Statutory Sick Pay (SSP)

Rights to receive SSP are amended under the Bill, removing the current three-day waiting period and meaning that SSP will be payable from the first day of absence. The existing Lower Earnings Limit (LEL) for qualifying for SSP, currently £123 per week, will also be removed. The Government will consult on the appropriate rate of SSP for those earning below the current weekly rate.

3. Flexible working

Employees will have a strengthened right to work on a flexible basis but it remains a right to request flexible working. Employers will still have the ability to refuse a flexible working pattern on the specified statutory grounds, provided it notifies the employee of the grounds for refusal and that it is reasonable to refuse on that basis.

4. Right to a stable contract

Following the government’s manifesto commitment to end “exploitative” zero-hours contracts, the Bill introduces a new right to a guaranteed-hours contract for those who work regular hours over a 12-week reference period, with provision for subsequent reference review periods if hours become regular over a longer period of time. Importantly, workers who want to remain on zero-hours contracts will be able to do so.

The Bill also provides for workers on zero and low hours contracts to be given ‘reasonable notice’ of changes in shifts or working time, with compensation for shifts cancelled or curtailed at short notice.

5. Fire and rehire

The Bill provides for ‘fire and rehire’ (dismissal and re-engagement) to be added to the list of reasons constituting an ‘automatic’ unfair dismissal other than in very limited circumstances when a business has no alternative due to financial circumstances affecting the employer’s ability to carry on the business as a going concern.

In addition, the Bill amends the existing provisions under the Trade Union and Labour Relations (Consolidation) Act 1992 relating to collective redundancy (affecting 20 or more employees) and the obligation to collectively consult with employees. These provisions will no longer apply to proposed redundancies at ‘one establishment’, meaning that the obligations will potentially be much more onerous for employers seeking to make redundancies over multiple workplaces.

6. Protection during pregnancy and after family leave

Pregnant women and new parents will have strengthened protections against dismissal for six months after returning to work from a period of family leave. This will be subject to separate regulations that will prevent dismissals of these employees other than in specific circumstances.

7. Increased harassment protection

Amendments to the Equality Act 2010 under the Bill will introduce express protection from third party harassment and strengthen the recently introduced employer duty to prevent sexual harassment (in force from 26 October 2024). Employers will be required to take ‘all reasonable steps’ to prevent sexual harassment, rather than ‘reasonable steps’ as currently provided. Sexual harassment will also be added to the list of protected disclosures, under existing whistleblowing provisions.

8. Action on gender pay and menopause

Under the Bill, large employers (likely 250+ employees) are required to produce action plans to address their gender pay gaps and to support employees through the menopause. Currently, these are recommended but not mandated for employers.

9. Pay

The Bill also includes powers to create a Fair Pay Agreement in the adult social care sector and reinstate the School Support Staff Negotiating Body.

The government has separately committed to remove the existing “discriminatory” NMW age bands, and the Low Pay Commission is now required to take into account the cost of living when setting the annual NMW rates.

10. Public sector contracts

The Bill reinstates the two-tier code for public sector contracts, with the aim of ensuring that employees working on outsourced contracts are offered terms and conditions no less favourable to those transferred from the public sector.

11. Trade unions

As anticipated, the Bill provides for the repeal of the Strikes (Minimum Service Levels) Act 2023. It will also bring in additional protections for trade union members and extensive measures to simplify the statutory recognition process as well as a new right of access for union officials to meet, represent, recruit and organise members in the workplace.

Employers must provide workers with a written statement of their trade union rights along with their statement of employment particulars.

12. Fair Work Agency

A new Fair Work Agency will bring together existing enforcement functions to enforce employment rights and to support employers in compliance.

Additional proposals for reform, not included in the Bill, include the following:

• employment status – the Government plans to consult on moving towards a single status of ‘worker’ and transitioning towards a two-part framework for employment status, differentiating between workers and the genuinely self-employed

• a right to switch off, under a statutory Code of Practice, to prevent employees being contacted out of hours other than in exceptional circumstances

• a review of the existing parental leave and carers’ leave systems

• a separate Bill (the Equality (Race and Disability) Bill) to introduce new mandatory ethnicity and disability pay gap reporting for large employers and extending equal pay rights to include race and disability.

I hope this allays fears that the new year is bringing in a whole raft of new employment laws! However, 2026 will be soon upon us and so careful scrutiny as the Bill goes through Parliament is essential to ensure employers are prepared for the changes. I will ensure that I pass on updates as they emerge.

Wishing you a happy end to 2024!

nicola.goodridge@goodhr.co.uk or +44 7917 878384