Successful business starts with Inclusiveness, Diversity & Culture.
In this instalment in our series on the new duty on employers to prevent sexual harassment, we look at the role of the Equality and Human Rights Commission (EHRC) in enforcing the new duty and in supporting employers to prevent sexual harassment in the workplace.
In the last few years the EHRC has focused on taking action in respect of harassment in the workplace. They have published detailed guidance (which is soon to be updated) as well as intervening to require employers to take action. This includes entering into "Section 23 Agreements" with employers such as McDonalds, Sainsburys, Ikea and the Highways Agency.
Why does the EHRC intervene and what is a Section 23 Agreement?
The EHRC is the regulatory body responsible for enforcing the Equality Act 2010. It has various enforcement powers at its disposal, including investigatory powers, the ability to impose unlawful act notices, the ability to require action plans to be drafted and complied with, as well as litigation powers. The EHRC can also enter into voluntary binding agreements with employers under which the employer agrees not to commit breaches of the Equality Act 2010. These are known as Section 23 agreements because they are based on section 23 of the Equality Act 2006.
The EHRC tends to use these agreements where there have been particular concerns of harassment or discrimination within a business, to try to address those concerns and require steps to be taken to prevent similar issues arising again. Sometimes a Section 23 Agreement will be entered into following litigation about harassment or discrimination at work, but litigation is not a pre-requisite to such an agreement.
The EHRC have indicated that a Section 23 Agreement will usually include setting out steps (such as audits, gathering data, training, redrafting policies) which should be taken by the employer, and a period of time over which the plan will be reviewed. If the employer fails to comply with the Agreement, legal action can be brought against it.
Perhaps importantly for employers, entering into a Section 23 Agreement is not of itself an admission of discriminatory acts.
Recent examples of Section 23 Agreements
In 2023 the EHRC entered into high profile Section 23 Agreements with both McDonald's Restaurants and IKEA UK. The prompts for EHRC involvement in each case were very different.
In the case of McDonald's, an interested trade union went to the press alleging many complaints of sexual harassment and that McDonald's had been using NDAs to avoid cases being disclosed. IKEA UK's Section 23 Agreement came about following a complaint of sexual harassment and assault from one former IKEA UK employee, and the EHRC were concerned by the handling of those allegations by IKEA UK.
Notice of both agreements was publicly announced by the EHRC, and details given as to the commitments made by the employers. Both employers agreed to take a number of proactive steps, such as communicating a zero-tolerance approach to sexual harassment, reviewing and implementing new policies and a commitment to provide training.
The EHRC generally gives employers opportunity to provide a comment for the press release, with McDonald's choosing to add a positive statement emphasising that the Section 23 Agreement was an opportunity to "bolster [its] best practice...approaches". The press release in respect of IKEA UK's agreement provides contact details for IKEA UK's press office.
Are there benefits to entering into a Section 23 Agreement?
A formal investigation by the EHRC can be disruptive and damaging. There is the potential to mitigate those effects and avoid a formal investigation by working with the EHRC to agree a Section 23 Agreement. Entering into a Section 23 Agreement can therefore be a cost-effective way of dealing with the EHRC's concerns and of addressing equality concerns throughout an organisation. Where they are complied with, Section 23 Agreements can help to avoid lengthy formal investigations or court action.
Arguably, Section 23 Agreements, and the way that they are dealt with by the EHRC, give employers a chance to get back on top of the narrative. They help to set a standard, which hopefully will help to avoid incidents of harassment at work, but in any event the actions taken by the employer as a result of the Agreement will be evidence of "reasonable steps" to prevent harassment, which may assist in defending legal proceedings and limiting liability should future claims be made. It's worth noting that Section 23 Agreements are negotiated rather than unilaterally imposed, giving the employer a say in the steps it will take.
Of course, it's not all good news. Section 23 Agreements are legally enforceable, so if an organisation fails to meet the requirements, the EHRC can initiate court proceedings. The EHRC will also monitor compliance with the Section 23 Agreement, which could create an administrative burden, but overall if an organisation has attracted the EHRC's interest and is offered a Section 23 Agreement, subject to taking advice to ensure that the obligations under that agreement are appropriate and manageable, the benefits are likely to outweigh the drawbacks.
What can employers learn from previous Section 23 Agreements?
There is commonality running through Section 23 Agreements in terms of the actions required to be taken by employers: proactive steps are required to communicate a zero-tolerance approach to sexual harassment, reviewing and implementing new policies and a commitment to monitor progress and to provide training.
These are steps that many employers take, or consider should be taken, in any event. Adopting a proactive approach may mean that if there is an issue, and the EHRC make enquiries about the employer's approach to that issue, further intervention by the EHRC may not be required, and even a Section 23 Agreement could be avoided.
It is clear that the EHRC will continue to play an active role in monitoring and trying to eliminate harassment in the workplace. That requires the co-operation of employers and therefore there is a benefit to the EHRC in fostering positive industrial relations in the majority of cases, as opposed to a more militant approach. Utilising Section 23 Agreements allows the EHRC to work collaboratively with organisations to improve equality practices and avoid further breaches of the Equality Act. Where the EHRC becomes involved, the key for employers is to develop a good working relationship with the EHRC, and to manage the process of negotiating next steps.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.