Despite various regulatory changes, firms can do more to prevent sexual harassment
Sexual harassment in the workplace has attracted growing concern globally over the past five years. The House of Commons Women and Equalities Select Committee (WESC) inquiry in July 2018 triggered a parliamentary debate around the need for stricter duties for employers to prevent unwanted sexual behaviour at work. In parallel, the Solicitors Regulation Authority (SRA) has prioritised tackling sexual misconduct in law firms and recent changes to its Codes of Conduct emphasise the expectation on firms to foster a culture of zero tolerance to counter-inclusive behaviours, including sexual misconduct.
But what proactive steps do firms need to take and what will the consequences be for non-compliance?
Calls for a proactive duty
Where employees sexually harass colleagues in the course of their employment, employers are vicariously liable unless they can show they took all reasonable steps to prevent it (section 109 of the Equality Act 2010). However, there is currently no positive obligation on employers to prevent sexual harassment in the workplace. Nor are employers liable under current employment law for the harassment of employees by third parties, for example, clients.
In June 2022, the Worker Protection (Amendment of Equality Act 2010) Bill included proposals to introduce tougher requirements on employers to prevent sexual harassment in the workplace. If passed, it would introduce new employer duties to take all reasonable steps to prevent sexual harassment in the workplace, by both colleagues and third parties.
Globally speaking, the bill would not be the first to introduce stricter legal liabilities for employers in this regard. In Australia, the Fair Work Legislation Amendment Bill 2022 was enacted on 6 March 2023. This imposes a positive duty on employers to prevent sexual harassment in connection with work. However, it does not go so far as to require employers to prevent the harassment of employees by third parties.
Although the bill progressed through the House of Commons with general support, it has met with some resistance in the House of Lords. The extent of the House of Lords amendments leaves one wondering whether it will be passed at all as there is doubt whether the parliamentary timetable will allow for another reading even if the government still supports the bill.
Regardless, these developments have not deterred the SRA from taking its own steps to reinforce its ability to take action in respect of proven sexual misconduct within the sector it regulates. While law firms do not currently have a legal requirement to proactively prevent sexual harassment in the workplace, the regulatory position is somewhat different.
The WESC inquiry recommended that regulators should adopt a firmer approach to tackling sexual misconduct within their regulated sectors. And over the past five years, the SRA has certainly demonstrated its intention to do so.
However, the SRA was left in a difficult position following the High Court’s judgment in Beckwith v SRA  EWHC 3231 (Admin). It was held that, in situations where there is no evidence of an abuse of position, a regulated person alleged to have sexually harassed a colleague, could not be found to have breached their regulatory requirements if the SRA could not point directly to a provision of the Code of Conduct that had been breached. It was not enough to rely on a breach of an overarching SRA principle.
These challenges aside, the SRA has clearly laid responsibility at the door of firms to prevent unethical conduct, by creating and maintaining the right workplace culture and environment. This is made clear in the Code of Conduct for Firms, the SRA Enforcement Strategy which sets out the SRA’s approach to regulation and enforcement, and in recent SRA guidance on both sexual misconduct and the workplace environment.
In summary, the policy agenda of the SRA coupled with the Beckwith judgment lay the foundation for much needed change and it became clear that for the SRA to be able to effectively enforce against sexual misconduct and other types of counter-inclusive behaviours that explicit obligations were needed in the Codes of Conduct. On 4 April 2023, the Legal Services Board (LSB) approved the SRA’s application to do just this.
New standards in respect of fair treatment in the workplace are now in effect, requiring solicitors to treat colleagues fairly and with respect, not to bully or harass colleagues or discriminate unfairly against them, and requiring law firm managers (such as partners) to challenge such behaviours (paragraph 1.5, SRA Code of Conduct for Solicitors, RELs and RFLs).
Firms must also treat those who work for and with them fairly and with respect, must not bully or harass colleagues or discriminate unfairly against them, and must ensure their employees meet this standard (paragraph 1.6, SRA Code of Conduct for Firms).
An existing duty
The SRA has made clear that the recent code changes clarify existing requirements rather than introduce new ones. Indeed, an obligation on firms to take proactive steps to prevent unethical conduct has existed for some time, ie by having in place effective governance structures, arrangements, systems and controls that ensure its managers and employees comply with the SRA’s regulatory arrangements (paragraph 2.1(c) of the SRA Code of Conduct for Firms).
The new standards make it explicitly clear that the SRA expects firms to take such proactive steps in respect of relationships at work, to prevent bullying, harassment (sexual or otherwise), and discrimination among colleagues. The requirements also clarify what the SRA expects firms to do to prevent such behaviours among all colleagues, not only where there is a seniority gap between the alleged perpetrator and victim. Of note, ‘colleagues’ refers not only to individuals who are employed by the firm, but also contractors, consultants, barristers and experts who may be instructed by the firm.
It is beyond the scope of this article to analyse the full extent of the new standards, such as the circumstances in which a manager might or might not be deemed by the SRA to have successfully discharged their duty to challenge inappropriate behaviour. Matters will be fact-dependent and much will fall upon how the SRA grapples with the nuances of each case.
The SRA’s updated workplace environment guidance suggests firms should, at the very least, be taking the following preventative steps: have effective policies and procedures to supervise work and monitor concerns; provide a safe environment for people to speak up and address them promptly and in a constructive manner; and have in place and implement specific policies and disciplinary procedures relating to bullying, harassment, discrimination and victimisation.
From a regulatory standing, law firms have a duty to be proactive in preventing sexual harassment and other types of counter-inclusive behaviours in the workplace. The updated Codes of Conduct could not be clearer in this respect. Whether this duty will be enshrined in legislation remains to be seen. Notably, if the bill is passed in its current form, the duty will extend significantly to include taking all reasonable steps to prevent harassment including from third parties outside of a firm’s direct control.
Moreover, firms could be subject to regulatory investigation and enforcement by the Equality and Human Rights Commission in addition to facing regulatory action under the SRA’s remit. While the parliamentary spotlight on workplace sexual harassment might be flickering, the SRA’s one is shining brighter than ever – crucially, it now has an even greater hook on law firms to initiate the changes it expects.
Corinne Aldridge is a partner in the Employment team; Jessica Clay is a partner in the Regulatory team and Lucinda Soon is a Legal Director in Regulatory team at Kingsley Napley LLP: kingsleynapley.co.ukTags:
Angela Jack dissects the recent ruling in Lidl Great Britain Ltd & others v Tesco Stores Limited & others  EWHC 873 (Ch)
Billions of pounds in NHS damages claims could have been avoided had recommendations from past reviews been followed by action, argues Kerstin Scheel
Laurence Howland explores the mechanisms of Chinese underground banking and the red flags
Chris Marston explores the ways in which law firms can establish a powerful collaborative culture
The Solicitors Journal spoke to James Fulforth, Kingsley Napley’s newly appointed Senior Partner, about his experiences in the law, his thoughts on the UK’s tech sector and what he hopes to achieve in his new role
Sophie Cameron takes a look at the news in the April Foreword