Harassment and Third-Party Liability: What 'All Reasonable Steps' Looks Like for a Small Business

The Worker Protection (Amendment of Equality Act 2010) Act 2023 introduced a new preventative duty on employers. It requires you to take 'all reasonable steps' to prevent sexual harassment of your employees — not just to respond when it happens.

The Employment Rights Act builds on this framework, and the direction of regulatory travel is clear: employers are increasingly expected to be proactive, not reactive.

For small business owners, 'all reasonable steps' can sound like a phrase designed for large organisations with dedicated HR and legal teams. So let's make it concrete.

What Does Third-Party Liability Mean?

Third-party harassment refers to harassment of your employees by people who aren't part of your business — customers, suppliers, contractors, members of the public.

The significance of this is that you can be liable for harassment your employees experience from third parties, if you haven't taken reasonable steps to prevent it. This is particularly relevant for businesses where employees deal with the public, work on client sites, or interact regularly with external contractors.

What Does 'All Reasonable Steps' Actually Look Like?

The key word is 'reasonable' — and what's reasonable is proportionate to your size and resources. A 10-person business is not expected to do what a 500-person organisation does. But proportionality doesn't mean doing nothing.

For a small business, reasonable steps typically look like this:

A clear harassment policy. Not a generic template downloaded from the internet, but a policy that reflects your actual business — your sector, your working environment, your specific risk areas. It should be accessible to all employees and reviewed regularly.

Training for managers and employees. This doesn't need to be a full-day programme. A well-structured 90-minute session that covers what harassment looks like, how to report it, and what happens when it's reported is far more valuable than a policy that nobody's discussed.

A clear reporting process. Employees need to know how to raise a concern — and to feel confident that it will be taken seriously. If the reporting route goes directly to the person they'd be reporting, that's a problem that needs solving.

Specific guidance for third-party interactions. If your employees deal with customers, clients, or contractors regularly, they need clarity on what to do if they experience inappropriate behaviour — and confidence that you'll back them up if they raise it.

A record of what you've done. In a tribunal, 'all reasonable steps' needs to be demonstrable. Keep a record of your policy review dates, training delivered, and any reports received and how they were handled.

Where Small Businesses Most Often Fall Short

The most common gap isn't malicious intent — it's assumed safety. Many small business owners genuinely believe that harassment doesn't happen in their business because they've never had a formal complaint. That assumption is dangerous.

Absence of complaints isn't the same as absence of problems. In small, close-knit teams, employees are often reluctant to raise concerns — particularly if the issue involves someone in authority, a long-standing customer, or someone the business owner has a close relationship with.

Creating genuine psychological safety — where people feel able to raise concerns without fear of consequences — is as important as having the right policy on paper.

The Practical Starting Point

If you haven't reviewed your harassment policy and procedures recently, start there. And if you're not sure what 'all reasonable steps' means for your specific business and sector, that's exactly the kind of question a good HR adviser can help you answer.

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Need help with this?

If you'd like support preparing for the Employment Rights Act, The People Consultancy offers practical, plain-English HR guidance for businesses across the South East and beyond.

We work with SME owners and in-house HR teams — whichever camp you're in, we can help you get ahead of this.

Get in touch for a no-obligation conversation: hello@thepeopleconsultancy.uk