New findings reveal a compliance crisis across the UK, confirming that many businesses are underprepared for the proposed changes to the sexual harassment and third-party obligations for employers within the Employments Rights Bill (ERB), which are set for implementation in October 2026.
The results of a major new poll conducted by the UK’s largest independent network of HR practitioners, The HR Dept, have revealed widespread uncertainty surrounding certain ERB changes. Of the 600 UK businesses owners and decision makers spanning a wide range of sectors from construction to childcare, who took part in the poll, nearly half (45%) admit that they do not understand or have a poor understanding of the proposed legislation. One in three (33%) stated that they are currently unprepared to manage and implement these changes.
Search Data Shows Public Anxiety Is Rising
This widespread confusion is clearly being mirrored in the public sphere. Indeed, Google searches for ‘third-party harassment’ have increased by 1082% (over 10 times) and ‘workplace sexual harassment’ have spiked by 113% since the announcement of the new laws in October 2024.
From Reactive Responses to Proactive Prevention
The legislation fuelling this concern is the shift to requiring employers to take ‘all reasonable steps’ to prevent sexual harassment, and the introduction of liability for third-party harassment from the very first incident. While many business leaders view these changes as ‘unworkable’ and ‘more red tape’, Nicola Morrison, Director of The HR Dept-Leicester & North West Leicestershire, argues that this perspective overlooks reality.
Nicola comments: “The new laws are an evolution of what good HR is already advocating. We cannot escape the reality that 40% of women and 18% of men have experienced unwanted sexual behaviour at work. The law is simply forcing a necessary shift from a reactive approach – waiting for a report of misconduct – to a proactive prevention strategy that reflects modern expectations around company accountability.”
The Financial Case for Training: Low Cost, High ROI
Despite the clear imperative for change, common complaints centre on the cost, with 72% of business leaders believing the wider ERB will bring negative financial consequences, citing harassment training costs as an unnecessary fiscal blow.
However, Nicola states that the financial risk outweighs the investment cost. She says: “Preventative e-learning costs as little as £2.50 per person. When you weigh that against a potential tribunal payout, which can be £6,000-£20,000 with a 25% uplift, the financial case for proactive investment is clear and delivers one of the highest returns on investment in HR.”
What ‘All Reasonable Steps’ Looks Like in Practice
This difficulty in responding to legislation is rooted in uncertainty; over a third (36%) of businesses failed to implement changes in response to the previous, less complicated ‘reasonable steps. To meet the new ‘all reasonable steps’ standard before October 2026, Nicola clarifies that while there is no official exhaustive list, the core components are practical and achievable.
She continues: “Whilst there is no legal definition of ‘reasonable’, there are clear steps that businesses can take to demonstrate their duty to meet this standard: establishing a zero-tolerance policy for harassment, creating a clear escalation route for reports, and implementing manager training so they can spot signs and intervene professionally. Businesses must record and evidence these steps, as that documentation will act as primary compliance defence.”
Which Businesses Are Most at Risk from Third-Party Harassment?
The failure to establish these proactive systems creates acute vulnerability, which is particularly alarming given that nearly half of business leaders (49%) are already unsure or actively believe their organisation is vulnerable to third-party harassment claims.
Nicola warns: “Size matters. Small businesses often lack dedicated HR resources, making compliance harder. But risk is also heightened in sectors with high public contact or isolated working conditions. This means Hospitality, Retail, Transport, and Logistics are especially vulnerable to claims arising from third-party harassment, where unpredictable customer behaviour increases the risk profile.” #
Using the Time to 2026 to Get Ready
The HR Dept is encouraging businesses to use the time between now and October 2026 to make what, for many, will just be minor tweaks to improve their processes, ensuring that they have taken ‘all reasonable steps’ to protect their people.
