ERA Explained: Third party harassment – managing supplier relationships

To set the scene for this podcast, one of the new reforms under the Employment Rights Act 2025, which will come in in October this year, is a new claim for third party harassment. This means that workers will be able to bring a claim in the employment tribunal, against their employer, where they have been harassed by a third party in the course of their employment and the employer has not taken all reasonable steps to prevent it. And it is worth mentioning that this protection will extend to all protected characteristics.

Almost all workers will have some interaction with third parties whilst at work. So, this will be a key area of focus for many. And what is meant by third parties is wide ranging. It will include customers, clients, suppliers, contractors, visitors, members of the public, and so on.

So, in this podcast, we’re going to focus on the supplier or commercial relationship, where the nature of the relationship means there’s probably quite a lot an organisation can do in terms of taking reasonable steps to prevent third party harassment. But do check out our on-demand webinar or our previous episode of ERA Explained for information about the harassment changes more widely.

So, Christy, this is obviously an important issue, but one that might be quite difficult to approach for lots of reasons. I’d be really interested in your initial reaction as a commercial lawyer, but also what you see as the challenges for organisations in responding to these reforms.

Christy Baker, Strategic General Counsel & Board Advisor (02:36)

Yeah, thanks. So, I mean, I think firstly, I’d say this isn’t just an HR issue. Clearly, HR colleagues are going to have to be very much involved. But this is one of these areas where I think a multidisciplinary approach is going to be absolutely key. So, I think you’re going to need to draw expertise, obviously from HR, but from legal, from audit potentially, and clearly we’re talking about supply relationships, so if you have a procurement team, they’re going to be fairly key as well.

But in order to get traction internally, because I know from my own experience, sometimes that’s hard, particularly for things which are seen as fairly dry, then you need a senior sponsor. You need to get that tone from the top. What you can’t do is do nothing. You can’t rely on the fact that you haven’t had any claims in the past, or any complaints in the past, as an excuse to do nothing. The law says you have to take all reasonable steps. And so that means doing at least something. And I think there are some comparisons potentially with the way corporates have dealt with other, sort of, failure to prevent type offences like the Bribery Act and the Modern Slavery Act.

Katherine Flower (03:46)

Yeah, and I understand that you were closely involved in introducing programmes to address those in your role at First Group. Can you just talk us through those and how that might help us now inform our approach to preventing third party harassment?

Christy Baker (04:00)

Yeah, of course. I mean, and as I say, there are definitely parallels. Obviously, the risk profile is maybe slightly different because of the fact they created actual corporate offences and with very, very high fines. I think the key here is that the reputational impact from this could be really significant, particularly in terms of recruitment and retention. And potentially it could have an impact, I suppose, on procurement processes where you are a potential supplier to government, for example. And also, we’re seeing increasingly customers and clients demanding that you meet their sort of minimum ESG obligations as well. So again, you’ll need to be making sure that you’re complying with this in order to comply with those terms in other contracts.

So when we’re looking at suppliers, what you’ll need to do is, obviously, look at your supply chain. You’ll need to be looking at the supply terms, obviously, but there will also be a whole lot more that you can do to prevent that third party harassment. And one point I would say in addition to looking at contractual terms is, I would take a risk-based approach to this.

Katherine Flower (05:17)

Thank you, you mentioned a couple of points there which I’d like to come back to and the first actually is contract terms. And I suppose one of the reasons that we wanted to focus on the commercial relationship in this podcast is because there will be a written agreement or terms of business. And your point there about documenting obligations, I think, on your supply to support your own compliance, I guess it would seem, to me at least, that that would be equally relevant to preventing third party harassment. So, could you just talk us through how you would approach updating those commercial terms and also when you would do it?

Christy Baker (05:53)

Yeah, sure. So, I think there’s a range of options that you can take, and as I say, that might be driven by a risk assessment approach. But it could, I think that you’re at one end of the spectrum, the sort of almost do nothing, which is just rely on general compliance with laws and provisions. I don’t think that’s enough. I think you need to do something. You need to put something into those contracts. So that might be, you know, specifically calling out this piece of legislation in the same way that lots of contracts nowadays, you know, do refer to the Bribery Act, for example, Modern Slavery Act. So I think, again, there are parallels there. You might look at specific warranties, you might look at indemnities. If you wanted to take a more demanding approach, you might require an assurance statement, whether that was annually or less frequently.

I think that in terms of the when, again, that’s going to depend. That’s a typical lawyer’s answer. But there are different times that you could do it. I think that what you should absolutely be doing is updating your template contracts if you have them. And obviously, we as a firm can help with that. So that on renewal, at the very least, these provisions are being addressed.

Again, perhaps in the higher risk areas, you might try and renegotiate midterm. Obviously that’s harder because the supplier might not want to. And so there is also a halfway house that you could do perhaps for all suppliers, which is sending out an email or something similar, telling them about what you expect of them and where you have a supplier code of conduct, which a lot of corporates do nowadays you’re updating that code of conduct and again you’re informing the suppliers that you’ve done so and drawing their attention to the expected behaviours.

Katherine Flower (07:52)

But I guess it doesn’t end there, does it? So, if these provisions are just left in the small print, they won’t have their intended effect. So, how do you think we could make that work on the ground? How do you think we can reach and influence the interactions that we’re most concerned about?

Christy Baker (08:10)

Yeah, no, and that’s difficult, obviously, getting that actual practical impact can be hard. It’s going to depend on the supplier relationship, but things that you might try and do are to either insist on, or request, that they flow these things down into their training materials, their induction materials, and get them to confirm they’ve done that. You might indeed look at stuff on your side of the fence and make updates to perhaps videos that people have to look at when they come on site, for example.  A lot of corporates play a health and safety video, for example, or get people to sign a health and safety statement. Well, you could add something into that. It might be a way of doing it. But ultimately, it’s going to come down to the practicalities of what your specific situation can and does permit. The key is it’s all reasonable steps. So, you do need to think about outside the box a little bit about what you can do.

Katherine Flower (09:08)

Yeah, no, absolutely. The second point I wanted to come back to was how an organisation assesses risk. We’ve talked about sort of different levels of risk. How did you go about assessing that for First Group in relation to these other legislative changes that we’ve mentioned? And how do you think that might help us now?

Christy Baker (09:29)

Yeah, so, I mean, certainly, if I look back to how First Group approached, for example, the Modern Slavery Act, we absolutely did a risk-based approach. And what we looked at primarily for that one, was the value of the contract, which is, it’s not really a risk indicator in some ways, or not specific to the legislation, but it shows the importance, perhaps, of the contract to you.

But then we also looked at specific sectors. So for modern slavery, for those who don’t know, First Group is a public transport operator. So uniforms, for example, for our staff, or electric batteries for vehicles, those sorts of things where there is a particular risk factor. So again, you might do the same here, obviously taking different factors into account. I think the sort of things that you might look at, as I said, I’ve talked about value, but the nature of the interactions, the nature of the goods and services, the level and volume and location of the interactions between supplier staff and your staff. If those interactions aren’t happening very often and in very controlled environments, you might say it’s lower risk. But if actually there’s a large volume of them and perhaps there’s no senior staff there or there is some kind of offsite location, you might conclude that it’s a higher risk.

Katherine Flower (10:53)

Higher risk, yeah, I agree.

Christy Baker (10:56)

I suppose one thing I would point out though, is that you’ve got to think about harassment, not just in person. It could also be online, it could be by phone, all those sorts of things. So you’ve got to, again, take that into consideration. And one thing, last thing I’d say on that, is also make sure you’re drawing on the expertise from across the organisation. You know, HR in particular, have so much experience of dealing, unfortunately, with these issues when they go wrong, but that is a key way of driving your risk assessment.

Katherine Flower (11:28)

Yeah, I agree. So we’ve talked about written terms, and we’ve talked about risk assessments, both really important part of an organisation’s response to this new law. What else? What else did you look at as part of your programmes for change in relation to the Bribery Act and Modern Slavery Act and GDPR? Is there anything else that we can draw from those that might help us here?

Christy Baker (11:50)

Yeah, again, I think there is and I think, I mean, all sorts of, you know, talking certainly to the in-house legal teams, they will know that we are all magpies by inclination, that it’s picking bits up from both your own processes and your own experiences, but looking at how other corporates have approached these things. And certainly, I think we got better and better at dealing with these things as they went through. The Bribery Act was the first one of them and so that was a blank sheet of paper. But then the Government produced some really helpful guidance, and again, I think it’s worth looking at that government guidance in this context, even though it’s not for this law, because it does set a really nice framework. It’s things like tone from the top, it’s training, awareness, risk assessment. It talks about all of these factors. So that’s a good place to go. One other thing that we used to do at First Group was we did sort of benchmark ourselves against particularly some of the FTSE 100 companies, which generally tend to publish a bit more on their compliance programmes, so you can see a bit more of what they’re doing. So, the really good corporate citizens of this world, that’s again a good place to go and look. Of course, you can come and talk to us here at Burges Salmon as well. We have a lot of experience and also talk to a lot of clients so again can informally help you with that sense of benchmarking.

Katherine Flower (13:16)

Yeah, no, I agree. I think it’s probably also worth saying in case this feels like it might be a sort of fairly onerous obligation, that there’s probably quite a lot an organisation is already doing in this space and will have thought about, for example, in relation to other obligations like the duty to prevent sexual harassment, where you will already have been thinking about risk assessments and your approach so you could build on those.

Finally, before we finish, we’ve been talking about how an organisation engages with its third parties, but of course, the organisation itself may be a third party in many of its relationships, and it may be asked by those suppliers how to support their compliance. So, I’d just be interested to hear your thoughts on how to respond or how to manage this if you are approached.

Christy Baker (14:12)

Yeah, I mean, I think it’s a really interesting and valid point. And I think that a supplier would be completely reasonable and within its bounds to come and say, well, okay, actually, yes, you want to impose those obligations on me in the contract, but actually, I have the same responsibility to my staff who are coming onto your site. And actually, you, as a customer, need to take the exact same steps. So there is a sort of “be careful what you wish for” element here.

Which is just, you know, I think be prepared that a supplier might well turn around and say, yeah, I’m happy to sign up to all those really onerous obligations, provided you do as well. So yeah, again, just think about that before you start engaging with your suppliers.

Katherine Flower (15:01)

Yeah, I guess, is there an opportunity here for learning and collaboration or am I being naive?

Christy Baker (15:06)

No, I think, no, I don’t think you are. I think there absolutely is, and again, where you have good relationships with your supply base. And I think it absolutely is one of those areas where you can learn and share experience and, both in preparing for, but also in particular, dealing with, particular issues.

Katherine Flower (15:24)

If something does go wrong. Yeah, no. Great, thank you. I think that’s all we have time for sadly. There’s so much more we could say on this. Thank you to everyone for joining us. I hope it was helpful and offers some guidance on how to approach this and where to start. We have lots more information available on this topic and other Employment Rights Act reforms on our ERA hub, including the webinar I mentioned. So please do have a look at that and get in touch if we can help.