Liability for Third-Party Harassment by Customers or Clients: What Businesses Need to Change in Their Contracts

If a customer shouts racist abuse at your staff, do your contracts give you clear power to act? If a long‑standing client sexually harasses a junior employee, do your policies and paperwork protect you in the Employment Tribunal, or add 25% to any award against you?

Third-Party Harassment is no longer a hazy HR concern. From October 2024, the Worker Protection (Amendment of Equality Act 2010) Act 2023 introduces a new duty on employers to prevent sexual harassment in the workplace. That duty covers harassment by customers, clients, patients, service users, suppliers and anyone else your workers deal with.

By 2025, tribunals will expect you to show that you planned ahead. The focus shifts from reacting to complaints to demonstrating that you took proactive steps to mitigate the risk of harassment in the first place. Falling short means:

• uncapped compensation for discrimination and harassment;
• a possible 25% uplift on sexual harassment awards; and
• reputational damage that can affect recruitment, tenders and regulators.

This guide explains:

• what Third-Party Harassment means under UK employment law;
• how the new proactive duty works; and
• the contract terms, policies, risk assessments and training you now need.

By the end, you will have a clear, practical framework to protect your staff, your business and your position in any future tribunal.

Key Points to Consider

• You now have a legal duty to take reasonable steps to prevent sexual Third-Party Harassment, including harassment by customers, clients, patients and suppliers. If you fail, compensation for harassment can increase by up to 25% in the Employment Tribunal.
• A standard dignity-at-work policy is not enough. You need: clear behaviour clauses in contracts, up‑to‑date risk assessments, regular training, visible reporting routes and evidence that you respond quickly when problems arise.
• Strong contracts, policies and records reduce legal exposure, support staff wellbeing and show regulators and courts that you treat Third-Party Harassment as a serious business risk, not a minor customer‑service issue.

What Is Third-Party Harassment Under UK Law?

Third-Party Harassment happens when someone who is not your employee harasses a worker while they are doing their job. The harasser might be a:

• customer or client;
• patient or service user;
• supplier or contractor;
• parent, student or visitor; or
• any other person your staff deal with because of work.

Under UK employment law, you can be liable if you fail to protect your staff from that conduct.

Under the Equality Act 2010, harassment is unwanted conduct related to a protected characteristic—or unwanted conduct of a sexual nature—which has the purpose or effect of:

• violating a person’s dignity; or
• creating an intimidating, hostile, degrading, humiliating or offensive environment.

The conduct does not need to be violent or repeated, and the harasser does not have to mean harm. If the impact on the worker is serious and it was reasonable for them to feel that way, the law may treat it as harassment.

The Act lists nine protected characteristics:

• age;
• disability;
• gender reassignment;
• marriage and civil partnership;
• pregnancy and maternity;
• race;
• religion or belief;
• sex; and
• sexual orientation.

Third-Party Harassment can be linked to any of these, or it can be sexual harassment without a direct link, for example, explicit sexual comments to a receptionist.

Sexual harassment means unwanted conduct of a sexual nature: sexual jokes, comments about someone’s body, sexual messages, unwanted touching or displaying sexual images. Harassment “related to sex” is slightly different—for example, sexist remarks about women in general or comments about a man’s role at work. The new Worker Protection Act focuses on sexual harassment, but harassment related to sex or any other protected characteristic remains unlawful.

Third-Party Harassment is especially difficult for employers because:

• you do not manage the harasser in the way you manage staff;
• you cannot run internal discipline against a customer or client; and
• staff often feel pressure to “keep the client happy” or tolerate abuse from “regulars”.

That is why clear contracts, visible policies and strong management backing are so important.

Real‑world examples include:

• retail staff facing racist insults from shoppers;
• a guest groping a member of bar staff;
• a patient repeatedly using homophobic language towards a nurse; or
• a senior client pressuring a junior consultant for dates and making sexual comments in meetings.

In each case, the employer has duties to act, and from 2024 onwards, tribunals will ask whether you did enough.

“No worker should have to accept abuse as part of their job.” — Principle reflected across UK equality and health and safety guidance

The Legal Evolution: From Section 40's Repeal to the Worker Protection Act 2023

To understand your position in 2025, it is helpful to see how the law has evolved.

When the Equality Act 2010 came into effect, Section 40 contained a specific rule on harassment by third parties. You could be liable if:

1. an employee was harassed by a third party during their work;
2. you knew they had been harassed on at least two previous occasions; and
3. you had not taken reasonably practicable steps to stop it.

This “three strikes” rule meant liability only arose on the third incident, once you had prior knowledge.

The government repealed Section 40 in 2013 to reduce regulation on businesses. Protection for workers did not disappear, but it became more complex. Claims instead relied on:

• arguments that your failure to act was itself harassment or discrimination under the Equality Act;
• breaches of the implied term of trust and confidence; and
• breaches of health and safety duties or the common law duty of care.

Many employers wrongly assumed that Third-Party Harassment was no longer a real risk.

Case law filled some of the gaps. In a key Court of Appeal case involving bus drivers who faced racist and sexist abuse from passengers, the court held that an employer can be liable where its own inaction creates or allows a hostile environment. You are not automatically responsible for what a passenger, shopper or patient says. However, once you are aware of what is happening and fail to act, your inaction can amount to harassment.

Social pressure also grew. Public focus on sexual harassment through the #MeToo movement led campaign groups, trade unions and charities to press for stronger protection, particularly in sectors such as hospitality, retail and entertainment. They argued that removing Section 40 had sent the wrong signal.

Parliament responded with the Worker Protection (Amendment of Equality Act 2010) Act 2023. It introduces a new proactive duty on employers to take reasonable steps to prevent sexual harassment at work, including harassment by third parties. It eliminates the three-strikes approach and replaces it with a forward-looking test. From October 2024, tribunals may increase compensation by up to 25% where a duty is breached.

Understanding the New Proactive Duty to Prevent Sexual Harassment

The new duty is the centrepiece of the Worker Protection Act 2023 and changes how you must approach Third-Party Harassment.

It applies to sexual harassment “in the course of employment”, covering both:

• harassment by colleagues and managers; and
• harassment by third parties such as customers, clients and service users.

It protects not only employees but also many other “workers” under UK law, so you must think about:

• agency staff;
• casual workers;
• zero‑hours staff; and
• some self‑employed contractors providing services personally.

The phrase “reasonable steps” is central. There is no fixed checklist in the Act, because what is reasonable varies with:

• your size and resources;
• your sector and risk profile;
• known issues or previous incidents; and
• guidance from bodies such as the Equality and Human Rights Commission (EHRC).

Tribunals will expect more than a paper policy; they will look for evidence of planning and action.

The duty is limited to sexual harassment, but that does not mean other harassment is acceptable. Behaviour linked to race, religion, disability or other protected characteristics still breaches the Equality Act, health and safety law and the common law duty of care. Sensible employers deal with all harassment through the same structured approach.

Where a worker proves sexual harassment and shows that you did not take reasonable preventative steps, the tribunal can increase compensation by up to one quarter. For serious cases, this can add tens of thousands of pounds. The EHRC can also investigate patterns of failure and require action plans.

You still face vicarious liability for harassment by your employees in the course of employment unless you can show that you took all reasonable steps to prevent it. The new duty adds an extra strand focused on prevention, which includes preventing harassment by third parties.

From a business angle, this is risk management. Prevention costs time and money; tribunal claims, legal fees, lost staff, and bad press usually cost far more.

What "Reasonable Steps" Really Means: Your Compliance Checklist

“Reasonable steps” sounds vague, but tribunals and the EHRC have given clear signals about what they expect. You need a joined-up system encompassing contracts, policies, training, culture, and swift action.

A practical way to think about this is as an eight‑part checklist.

“Tribunals do not expect perfection, but they do expect employers to show their homework.” — Typical Employment Tribunal approach to reasonable steps

1. Carry Out a Third-Party Harassment Risk Assessment
   • Identify public‑facing and client‑facing roles, lone working, late‑night work, high‑conflict situations and big power gaps (for example, junior staff dealing with major clients).
   • Assess how likely harassment is in each setting and how serious the impact could be.
   • Use that analysis to decide where you need extra controls.
2. Write Clear Policies
   • Explain what harassment is, including sexual harassment and harassment by third parties.
   • Describe how staff can report issues and what you will do.
   • Cross-reference dignity at work, health and safety and grievance policies so staff are not left guessing.
3. Provide Regular Training
   • Cover induction, refreshers and extra sessions for managers.
   • Use realistic scenarios from your sector.
   • Make it clear that staff can report harassment by customers or clients without blame.
4. Create Confidential Reporting Routes
   • Offer more than one option—for example, line manager, HR, a senior named contact or a confidential line.
   • Make sure staff know that raising concerns in good faith will not lead to disciplinary action.
5. Show Visible Leadership
   • Senior managers must state clearly that harassment by customers and clients is not “part of the job”.
   • Back staff who refuse service to abusive customers.
   • Be prepared to walk away from clients who cross the line.
6. Communicate Standards Externally
   • Use signage, contract clauses, visitor codes of conduct and website messages.
   • When people breach those standards, act and record what you did.
7. Respond Quickly and Fairly
   • Protect the worker from further contact.
   • Investigate, record what happened and take meaningful action against the third party.
   • A slow or dismissive response often turns a single incident into a long‑running legal risk.
8. Keep Records and Review
   • Document risk assessments, training attendance, complaints, investigations and outcomes.
   • Review regularly to spot patterns and gaps.
   • Use this paperwork as part of your defence if a claim reaches the tribunal.

The exact measures for a late‑night bar will differ from those for a GP practice or a corporate law firm, but the checklist stays much the same.

Contractual Changes Businesses Must Make in 2025

Policies and training matter, but contracts give you legal levers. In 2025, your agreements with clients, customers, suppliers and contractors should reflect your duties around Third-Party Harassment, so you can act decisively when outsiders mistreat your staff.

Without sound wording, you may struggle to:

• remove a harassing consultant from your site;
• require a client to change its main contact; or
• end an arrangement where repeated harassment occurs.

Thoughtful drafting also helps you show a tribunal that you tried to anticipate and prevent harassment.

Key areas to review include:

• Client and customer service agreements. These should state that your staff must be treated with dignity and respect and that harassment or abuse will not be accepted. For ongoing relationships, we reserve the right to insist on a different client contact in the event of harassment.
• Supplier and contractor agreements. Where third‑party staff work alongside your own (for example, cleaners, security or IT contractors), require the supplier to prevent their people from harassing your staff and to act quickly if they do. Keep a clear right to remove any individual from your premises or account.
• General terms and conditions. Gyms, theatres, restaurants, and similar businesses can state in their booking terms that abusive conduct towards staff may lead to refusal of service, removal from the premises, and bans.
• Visitor codes of conduct. Offices, schools, clinics and public buildings can issue short codes that visitors must accept when signing in, covering respectful behaviour and consequences for breaches.
• Employment contracts. Refer to your Third-Party Harassment policy and remind staff that they can report harassment from any source. Confirm that staff will not be disciplined for refusing to complete a task where they reasonably believe it would expose them to serious abuse, provided they report it promptly.
• Non‑disclosure agreements (NDAs). Do not attempt to use NDAs to stop workers reporting harassment to the police, regulators or tribunals. You can still protect trade secrets and financial details, but make sure agreements do not prevent protected disclosures or lawful reporting.

When drafting, use clear wording rather than vague references to “appropriate behaviour”. State plainly that harassment, discrimination and abuse towards staff are unacceptable and may lead to suspension of service, removal of individuals or contract termination. For cross-border work, choose English law and jurisdiction where possible, so that your internal duties align with your contractual rights.

Sample Contract Clauses Table

Drafting and Updating Your Third-Party Harassment Policy

Your Third-Party Harassment policy is the backbone of your approach. It explains expectations to staff, provides managers with a script when trouble arises, and demonstrates to tribunals that you took prevention seriously.

A strong policy usually contains:

• A leadership statement. A short message from senior leaders that harassment from any person—including customers, clients, patients, parents, contractors and visitors—will not be accepted, and that staff are encouraged to raise concerns.
• Clear definitions. Simple explanations of harassment under the Equality Act 2010, including harassment linked to protected characteristics and sexual harassment, with sector‑specific examples.
• Scope. Confirmation that the policy applies wherever staff do work for you: your premises, client sites, work travel, events and online channels such as email and social media.
• Responsibilities. Plain‑language expectations of staff (treat others with respect, report concerns), managers (act quickly, support staff, record events, involve HR) and the organisation (investigate, act against third parties, protect staff from victimisation).
• Reporting routes. Details of options such as line managers, HR, a named senior person or a confidential hotline, along with reassurance that raising concerns in good faith will not lead to disciplinary action.
• Investigation overview. A high‑level description of how complaints are handled: quick acknowledgement, appointment of an investigator, gathering of statements and evidence, and decisions on the balance of probabilities.
• Actions against third parties. Examples include verbal or written warnings, restrictions on contact, bans from premises, contract changes or termination, as well as internal support options such as counselling or temporary adjustments to duties.
• Communication and review. How the policy is shared (e.g., induction, intranet, training) and how often it is reviewed, along with links to relevant policies such as health and safety, dignity at work, and grievance procedures.

Review the policy at least annually, and more often if the law changes or a serious incident exposes gaps.

Implementing Effective Risk Assessments for Third-Party Interactions

Risk assessments are not only for physical hazards. Health and safety law, together with the new duty, expects you to assess the risk of Third-Party Harassment and put controls in place. A written assessment is powerful evidence that you have properly considered the risk.

Work through these stages:

1. Map interactions. Identify where staff meet outsiders:
   • front‑of‑house roles (reception, retail, hospitality, call centres);
   • community or home‑visiting roles (care workers, engineers, field sales);
   • professional roles meeting clients on‑site or at events; and
   • remote channels (telephone, email, chat, social media).
2. Identify hazards. For each interaction, think about potential abuse:
   • verbal abuse, racist or sexist insults, sexual comments;
   • unwanted touching or physical intimidation;
   • online harassment or hate messages.
3. Assess who might be harmed and how badly. Consider:
   • the experience and seniority of staff;
   • lone working and late‑night work;
   • mental and physical health impacts.
4. Decide on controls. These may include:
   • environmental steps: layout changes, CCTV, panic alarms, improved lighting, security presence;
   • procedural steps: two‑person visits for high‑risk homes, early closing after incidents, clear service‑refusal rules and quick‑help systems; and
   • training on spotting escalating behaviour and withdrawing safely.
5. Consult staff. Frontline workers often know where real risks lie—regular abusers, unsafe routes, problem times of day. Build their feedback into your assessment.
6. Record and review. Write down findings, controls, responsible owners and review dates. Revisit at least annually and after serious incidents or major changes in work patterns.

Training Requirements: Who Needs What and When

Training is one of the clearest “reasonable steps” you can take. Without it, even the best policy can sit unread.

Think about the four main groups.

1. All staff
   • Basic understanding of harassment under the Equality Act, including Third-Party Harassment.
   • Clear message that they have a right to be safe from harassment by customers, clients and others.
   • Simple explanation of how to report concerns.
2. Frontline staff
   • Practical skills for de‑escalation and safe exit.
   • How to set boundaries politely but firmly, end abusive calls, signal for help and write quick incident notes.
3. Managers and supervisors
   • Deeper knowledge of the law and your policies.
   • Skills for listening with empathy, avoiding minimising language, taking immediate protective steps and working with HR on investigations.
4. HR and senior leaders
   • Detailed understanding of the legal framework, tribunal expectations and investigation techniques.
   • How to balance client relationships with staff safety and how to handle settlement talks lawfully.

Good training normally covers three themes: recognition, reporting and responding. Utilise a combination of online modules, workshops, case studies, and brief refreshers during team meetings. Keep records of attendance, content, and dates so you can demonstrate to tribunals that the training was real and recent.

Establishing Clear Reporting and Response Procedures

Even with strong prevention measures, Third-Party Harassment will still happen. Your response in the first hours and days matters greatly.

An effective procedure should:

• Offer multiple reporting routes. Line managers, HR, safeguarding leads, named senior contacts and (if possible) a confidential reporting line.
• Promote psychological safety. Make it clear that no one will be punished or treated badly for raising concerns in good faith, even if the complaint is not upheld.
• Focus first on safety and support. The initial response should be private, respectful and practical:
  • remove the worker from contact with the harasser;
  • offer a break or the rest of the day off on full pay for serious cases; and
  • provide safe transport home if needed.
• Set out a clear investigation process. Appoint an impartial investigator, gather accounts from the worker and witnesses, collect any CCTV, emails or messages, and—where realistic—seek a response from the third party or their employer. Remember the civil standard is the balance of probabilities, not proof beyond doubt.
• Use sensible timescales. Acknowledge complaints quickly (ideally within one or two working days) and aim to conclude investigations within a reasonable period (often four to six weeks, depending on complexity), with regular updates.
• Document everything. Record reports, safety steps, investigation notes, evidence and outcomes. These records help manage repeat incidents and support your defence if a claim is brought.

Taking Action Against Third-Party Harassers: Your Options and Obligations

Once you find that Third-Party Harassment has taken place, you must take concrete action.

For customers or members of the public, options range from:

• firm verbal warnings (logged);
• written warnings or recorded notes on their account;
• refusal of further service or asking them to leave;
• temporary or permanent bans; and
• in serious cases, supporting the worker in reporting to the police and supplying evidence.

For clients, commercial pressure can tempt managers to downplay behaviour. That is risky. Options include:

• senior staff speaking to the client contact, explaining what happened and restating expectations;
• insisting that the individual is removed from the account or that all future meetings are supervised; and
• in severe or repeated cases, reducing or terminating the contract, relying on your behaviour clauses.

For contractors and suppliers:

• contact the supplier’s management, share your findings and request removal of the individual from your site or account;
• use contractual rights to suspend or end the agreement if necessary; and
• assess how the supplier’s response affects your ongoing relationship.

When choosing the level of action, weigh up:

• seriousness of the incident;
• any pattern of behaviour;
• vulnerability of the worker; and
• previous warnings or bans.

Staff should see that reports lead to real consequences. Inform the affected worker so they are aware of the actions taken, and review your risk assessments and policies following significant incidents.

Supporting Employees Who Experience Third-Party Harassment

Supporting workers who experience Third-Party Harassment is both a moral duty and an important part of showing that you took reasonable steps.

Key elements include:

• Immediate care. Move the worker to a safe space, listen without judgment and offer time off on full pay after serious incidents, plus safe transport home where needed.
• Access to professional support. Remind staff about any Employee Assistance Programme (EAP) or occupational health services. If you do not have an EAP, signpost reputable external support such as GP services or mental health charities.
• Follow‑up contact. Arrange check‑ins over the following days and weeks to see how the worker is coping and whether anything at work is making it harder.
• Work adjustments (if wanted). Discuss options such as different shifts, moving away from certain locations, pairing with colleagues or, where appropriate, transfer to another role—while avoiding any impression that the worker is being punished.
• Clear information. Keep the worker updated on the investigation and any action taken, within data‑protection limits.
• Protection from victimisation. Make it clear that any negative treatment linked to raising a complaint—such as losing good shifts, being excluded from meetings or being labelled as “difficult”—will be treated as a serious disciplinary issue.

Visible support builds trust and can reduce the likelihood of claims.

Industry-Specific Considerations: Retail, Hospitality, Healthcare, Professional Services

The legal test is the same across sectors, but risks and controls differ.

• Retail and hospitality
  • High volumes of customers, long hours and alcohol increase risk.
  • Priorities: clear policies backing staff who refuse service, strong manager presence, simple ways to call for help, bans for repeat offenders, and visible signs at entrances and tills.
• Bars, clubs and hotels
  • Late nights and alcohol bring extra pressure.
  • Controls may include door staff, panic buttons, radios, focused CCTV, two‑person rules for late‑night tasks and training on spotting predatory behaviour and working with security and police.
• Healthcare and social care
  • Staff may face harassment from patients with confusion, distress or mental health conditions, as well as from relatives, including instances of sexual violence in healthcare settings.
  • You have duties both to staff and to patients or service users. Risk assessments should consider clinical factors, and policies must link to safeguarding and guidance from bodies such as the CQC and NHS England.
• Home care and community work
  • Lone workers visiting homes can face sexual comments, racism or aggression from family members.
  • Controls: clear behaviour ground rules agreed with clients, rights to end visits if unsafe, check‑ins during shifts and “no lone working” rules for higher‑risk households.
• Professional services (law, accountancy, consulting, finance)
  • Harassment may be more subtle: sexist remarks in meetings, pressure to attend heavy‑drinking events or “banter” that goes too far.
  • Junior staff can feel unable to complain about powerful clients. Tone from the top is vital, along with strong contract clauses, careful venue choices and clear alcohol rules.
• Education (schools, colleges, universities)
  • Risks from students, parents and visitors, including face‑to‑face and online abuse.
  • Policies must link to safeguarding, student behaviour codes and parental conduct policies, with governing bodies backing staff who enforce boundaries, including bans on abusive parents from sites where required.

Across all sectors, tribunals will look at whether you understood your specific risks and adjusted your approach accordingly, rather than relying on a generic template.

The Role of Litigated in Navigating Third-Party Harassment Law

Keeping up with UK employment law is demanding, especially where Third-Party Harassment intersects with health and safety, contract law and Equality Act duties. This is where Litigated can help.

Litigated publishes detailed legal guides that explain complex rules in clear language for both legal professionals and non‑lawyers. Its employment law resources and Employment Tribunal commentary show how statutes, case law and official guidance work in real cases, including harassment by customers or clients.

Through its Lex Rex Employment Tribunal and Law platform, Litigated tracks important Employment Appeal Tribunal decisions. For example, its analysis of the case often referred to as W v Highways England & Others (the “KPMG” case) explores how organisations can face liability even where they are not the direct employer. That insight helps explain how “agency” and “knowing help” under the Equality Act may affect complex arrangements with consultants, suppliers and outsourcers.

Litigated also provides practical support on drafting. Its guidance on legal documents can help you frame the clauses you need in:

• client agreements;
• supplier contracts;
• visitor policies; and
• staff handbooks.

The founder’s background in global business management, law and legal technology means the material reflects commercial realities for small businesses, charities and large employers alike.

Used well, Litigated can help you move from firefighting incidents to building a structured, legally sound approach that protects both staff and organisation.

Common Mistakes Businesses Make and How to Avoid Them

Many employers only notice gaps in their approach when a claim reaches the tribunal. These are frequent mistakes—and how to avoid them:

1. Treating the duty as a tick‑box exercise
   • Downloading a template policy and never discussing it.
   • Fix: keep the policy live through training, reminders and regular reviews.
2. Ignoring contract updates
   • Strong internal rules but no rights to remove a harassing consultant or client contact.
   • Fix: add behaviour clauses and removal rights to new contracts and vary key existing agreements.
3. Thin or outdated training
   • Annual slide decks with no interaction rarely convince tribunals.
   • Fix: use interactive sessions, real examples and tests of understanding, and keep attendance logs.
4. Managers downplaying complaints
   • Comments such as “that’s just how customers are” damage staff and your defence.
   • Fix: train managers on appropriate responses and review complaint handling.
5. Putting key clients above staff safety
   • Avoiding challenging high‑value customers despite clear harassment.
   • Fix: make it explicit that safety comes first, even if that means ending relationships.
6. Poor documentation
   • No records of incidents, meetings or actions.
   • Fix: introduce simple templates for incident logs and investigation records and train managers to use them.
7. No external communication
   • Staff are told harassment is banned; customers and visitors are not.
   • Fix: use signs, website notices and contract clauses to set expectations.
8. Unclear escalation in real time
   • Staff do not know who to call when a situation escalates.
   • Fix: define escalation routes, including when to involve security or senior managers, and practise them.
9. Failure to learn from incidents
   • Closing files without updating risk assessments, contracts or training.
   • Fix: carry out brief reviews after serious cases and act on lessons.
10. Assuming the duty only bites large employers
    • Believing that small size is a defence.
    • Fix: recognise that the duty applies to all employers; scale your response, but do not ignore it.

A short internal audit of contracts, policies, training, incident logs and staff feedback can reveal these gaps before they are tested in court.

What Employees Need to Know: Your Rights Under the New Law

If you are an employee or worker, you do not have to accept harassment from customers, clients, patients or anyone else you meet through your job. UK law gives you clear rights.

You have a right to work in an environment where your dignity is respected. Harassment includes:

• unwanted conduct linked to protected characteristics (for example, race, religion, disability, sex or sexual orientation) that makes you feel humiliated or intimidated; and
• unwanted sexual conduct such as explicit comments, sexual jokes, staring, sexual messages or unwanted touching.

From October 2024, your employer has a duty to take reasonable steps to prevent sexual harassment, including harassment by third parties. They should have:

• policies,
• training,
• clear complaint routes, and
• a habit of acting quickly when staff raise concerns.

If you experience Third-Party Harassment:

1. Stay safe. If you can, remove yourself from the situation.
2. Report promptly. Inform your manager, HR representative, or another designated person as soon as possible.
3. Record details. Note dates, times, what was said or done and any witnesses. Keep copies of emails, messages or online posts.
4. Ask about support. This may include counselling, time off, or temporary changes to duties.

A reasonable employer will listen, protect you from further contact, investigate fairly and keep you updated. You should not be treated worse because you complained. If you feel side‑lined or blamed, raise that as a separate concern.

If your employer fails to act, you can:

• raise a formal grievance;
• contact ACAS for Early Conciliation; and
• consider an Employment Tribunal claim.

Time limits are typically three months, minus one day, from the date of the act you are complaining about, subject to ACAS conciliation rules, so seek advice promptly. Compensation for harassment is uncapped, and in cases of sexual harassment where the new duty is breached, tribunals can increase awards by up to 25%.

Enforcement and Penalties: What Happens If You Don't Comply

Ignoring Third-Party Harassment carries real financial and legal risks.

If a worker succeeds with a harassment claim in the Employment Tribunal, the tribunal can award compensation for:

• lost earnings; and
• injury to feelings, using guideline Vento bands.

For the most serious cases, injury‑to‑feelings awards alone can exceed forty thousand pounds, before any loss of earnings is added.

Under the Worker Protection Act, if the case involves sexual harassment and the tribunal finds that you breached your proactive duty, it can increase the total compensation by up to 25%. For example, an award of £40,000 could rise to £50,000.

You will also face your own legal costs. Defending a contested tribunal claim can result in tens of thousands of pounds in fees, as well as lost management time. Even if you win, you rarely recover all of your costs.

Tribunals can award aggravated damages where your conduct was particularly poor—for example, if you victimised the worker for complaining, ran a biased investigation or tried to silence them with an overbroad NDA.

Beyond individual cases, the EHRC can investigate organisations where it believes there is a pattern of discrimination or harassment. It can issue unlawful‑act notices and require legally binding action plans. Breaching those can lead to court orders and significant fines.

Reputational damage is harder to cost but very real. Tribunal judgments are public, and many are reported in the press or shared widely online. Stories of staff facing racist or sexual abuse from clients while managers did little can deter both customers and job candidates.

Within your business, you may notice higher absenteeism, low morale, staff turnover, and weaker performance. All of this underlines that ignoring Third-Party Harassment is an expensive decision.

Preparing for Tribunal Claims: Evidence and Defence Strategies

Even with strong systems, you may still face an Employment Tribunal claim. How you prepare, and the evidence you hold, will shape the outcome.

In harassment cases, the worker must first prove that facts suggest harassment and that the employer has failed to address it. Once that hurdle is passed, the burden shifts to you to show that:

• you took all reasonable steps to prevent harassment; or
• your actions were otherwise lawful.

Tribunals will examine what you did before the incident, how you responded and what you can prove.

Helpful evidence includes:

• written harassment and Third-Party Harassment policies, with dates of issue and review;
• risk assessments identifying public‑facing roles and specific controls;
• training records showing content, attendance and refreshers;
• induction materials and staff communications;
• incident reports, investigation notes and outcome letters; and
• examples of earlier cases where you acted against abusive customers or clients.

Common weaknesses include:

• policies that were never shared or explained;
• training that happened once several years ago;
• risk assessments that ignore harassment risks; and
• delayed or superficial investigations with patchy records.

Witness statements also matter. Managers and HR staff may need to give statements explaining decisions and how your systems work. Consistent evidence that matches documents looks strong; contradictions damage trust.

You may also draw on external expertise from equality or HR specialists who helped design your approach. In some cases, their evidence can show that your systems align with good practice.

Settlement is another key topic. Through ACAS Early Conciliation and during proceedings, you may choose to settle claims via an ACAS COT3 agreement. Settlement can control risk and costs, but any terms must allow workers to speak to regulators or the police when the law requires it.

If a claim is issued, instruct experienced employment law advisers early. They can stress‑test your defence, highlight evidence gaps and help you present your “reasonable steps” story clearly. Whatever the outcome, treat each case as a learning opportunity to strengthen your approach.

Creating a Zero-Tolerance Culture: Beyond Legal Compliance

Law sets the minimum standard; culture decides what really happens when a customer abuses a cashier or a client crosses the line in a meeting. Without a zero‑tolerance culture, even a well‑written policy can fail.

Zero tolerance does not mean that every minor incident leads to the harshest penalty. It means:

• all harassment is taken seriously;
• staff feel safe raising concerns; and
• there is always a real response.

Leaders must:

• speak openly about Third-Party Harassment;
• acknowledge where the organisation has fallen short; and
• commit to doing better.

They should praise staff who speak up, back those who refuse service to abusive customers and share anonymised examples of actions taken against clients or visitors. Manager objectives can include staff wellbeing and complaint handling, in addition to financial targets.

Bystanders also play a role. Training can help colleagues:

• recognise when someone is being harassed; and
• intervene safely—by distracting, staying with the person targeted, calling a manager or reporting after the event.

Regular communication through newsletters, town-hall updates, anonymous staff surveys, and exit interviews helps track progress and uncover hidden problems.

“Culture is what people do when nobody is watching.” — Nick, Litigated

Every incident presents an opportunity to improve. Ask what went wrong, what support worked, what blocked reporting and how to make it easier next time.

A strong culture not only reduces tribunal risk; it helps you keep good staff, attract talent, win work from clients who value ethical practice and build trust with regulators.

Practical Steps to Implement Changes Before 2025 Deadlines

With the Worker Protection Act taking effect in October 2024 and case law developing through 2025, you need a structured plan rather than scattered actions.

First month

• Brief senior leadership on the new duty and its link to Third-Party Harassment.
• Carry out a quick gap analysis of policies, contracts, training, risk assessments and complaint records.
• Appoint a project lead to coordinate changes.

Months 1–3

• Draft or update your Third-Party Harassment policy, including definitions, reporting routes and actions against third parties.
• Begin risk assessments for roles with public or client contact.
• Review key contracts with clients, suppliers and contractors; add behaviour clauses and removal rights where necessary.
• Design your training programme and select any external providers.

Months 3–6

• Roll out training, starting with managers and frontline staff, using examples from your business.
• Put reporting and response procedures into practice and test them with scenario exercises.
• Install or upgrade physical measures identified in risk assessments (signage, alarms, focused CCTV).
• Communicate behaviour standards to clients and customers through contracts, emails and on‑site notices.

Ongoing (after 6 months)

• Provide refresher training at least annually.
• Review risk assessments each year and after serious incidents.
• Check policies quarterly so they stay aligned with law and practice.
• Monitor incident reports for patterns and adjust controls.

Treat this as a structured change project: set milestones, assign responsibilities, allocate a budget and measure progress. Where you lack expertise, consider bringing in HR consultants, employment lawyers, or equality specialists.

Resources from Litigated can support you at each stage—from understanding the legal framework to drafting clauses and planning training content.

Frequently Asked Questions About Third-Party Harassment Law

Question 1: Does the new duty only apply to sexual harassment or all types of Third-Party Harassment?

The new proactive duty in the Worker Protection Act applies specifically to sexual harassment. Other forms of Third-Party Harassment connected to protected characteristics such as race, religion or disability remain unlawful under the Equality Act and under health and safety and common law duties. You can still be liable if you ignore those cases, even though the 25% uplift applies only to sexual harassment.

Question 2: What size of business does this apply to?

The duty applies to all employers, regardless of size. A ten‑person shop and a thousand‑person company both have to take reasonable steps to prevent sexual harassment, including Third-Party Harassment. What constitutes reasonable will vary depending on resources and risk, but there is no minimum headcount threshold.

Question 3: Can we be held liable for harassment by someone with whom we have no contract, such as a member of the public?

Yes. The law is not limited to people with whom you have contracts. If staff are abused by passengers, shoppers, event attendees or other members of the public while working, your duties can arise. You are not responsible for every comment a stranger makes, but once you are aware of the risk and fail to act, liability can follow.

Question 4: What if a client is commercially critical to our business—can we still take action?

You must. Your duty to protect staff from harassment does not disappear because a client is valuable. Ignoring Third-Party Harassment for commercial reasons increases legal risk and damages morale. Start by explaining your standards, asking for behaviour changes and requesting different contacts or supervised meetings. If harassment continues or is severe, you should be prepared to scale back or end the relationship.

Question 5: How do we balance customer service with protecting staff from harassment?

Good customer service does not require staff to accept abuse. Clear boundaries often enhance the experience for the majority of customers who seek a safe and respectful environment. Train staff to set limits politely, redirect angry customers into formal complaint channels and end interactions that cross the line, with managers backing those decisions.

Question 6: What records do we need to show we have taken reasonable steps?

Keep:

• copies of harassment and Third-Party Harassment policies with review dates;
• training content and attendance lists, including refreshers;
• written risk assessments and updates;
• incident reports, investigation notes and outcome letters; and
• copies of communications with customers, clients or suppliers about behaviour standards or action taken.

Store these securely for several years so they are available if a claim arises later.

Question 7: What happens if an employee makes a false allegation against a client?

Investigate every allegation fairly and with an open mind. Deliberately false allegations are relatively rare; more often, people remember events differently or misunderstand each other. Gather evidence from all sides and reach a reasoned conclusion. If you find that a worker knowingly makes serious accusations, that may become a disciplinary matter. Therefore, take HR or legal advice and avoid creating a climate where honest mistakes feel dangerous to report.

Conclusion

Harassment by customers, clients, patients and other outsiders is now firmly on the legal radar. With the Worker Protection Act in force, employers shift from reacting to complaints to demonstrating that they have taken proactive steps to reduce the risk of sexual harassment.

The stakes are high: uncapped compensation, a possible 25% uplift on sexual harassment awards, legal fees, potential EHRC investigation and reputational damage. On the positive side, getting this right protects staff, strengthens culture and shows regulators and courts that you take your duties under employment law seriously.

To stand on solid ground in 2025, you need more than a basic HR compliance. You need:

• contracts that set clear conduct standards;
• risk assessments that address customer and client harassment;
• training that gives staff and managers confidence;
• reliable reporting and response procedures; and
• a record of strong action when harassment occurs.

Start now: review your current position, update contracts and policies, brief managers and draw on trusted resources such as Litigated. The question is not whether you will face difficult behaviour from third parties, but whether you will be ready when it happens.

Nick

With a background in international business and a passion for technology, Nick aims to blend his diverse expertise to advocate for justice in employment and technology law.