Picture the scene: you’re in a pub with your mates, putting the world to rights over a couple of beers. The waiter overhears your conversation and gets offended. He complains to his boss, who thinks nothing of it. A few weeks later, the same boss is hauled before a committee to answer for your wrong-think.
This is a plausible scenario under Labour’s new legislation, which is set to take effect in 2026.
Labour’s proposed workers’ rights reform introduces a duty on employers to take “all reasonable steps” to prevent workers from being harassed by third parties, which includes customers, clients, and members of the public.
Employers could face legal action if they don’t take these “reasonable steps”.
This expands upon the existing requirement under the Worker Protection (Amendment of Equality Act 2010) Act 2023, which only mandated taking “reasonable steps” to prevent sexual harassment by third parties without providing a standalone claim for such harassment.
Under the proposed legislation, harassment is defined as “unwanted conduct that has the purpose or effect of violating the recipient’s dignity or creating an intimidating, hostile, degrading, humiliating or offensive environment”.
This could mean overheard conversations will amount to harassment of staff, the Equality and Human Rights Commission (EHRC) warns, adding that such a move could “disproportionately curtail” freedom of expression.
Publicans could ultimately be forced to ban customers from discussing controversial topics like religion and transgender rights due to Labour’s proposed workers’ rights reforms, the EHRC fears.
Pubs could be forced to ban customers from discussing controversial topics like religion and transgender rightsPEXELSLabour argues that this legislation is crucial for creating safer workplaces, with Anneliese Dodds, Minister for Women and Equalities, stating: “This Government is determined to ensure that we not only Make Work Pay; we also make work safe. Too many people feel uncomfortable or unsafe at work due to sexual harassment and we are putting every effort into putting a stop to it.” This reflects Labour’s commitment to enhancing workplace safety and equality.
While ministers acknowledge there may be challenges around freedom of expression, particularly regarding “legitimate debates which are carried out in a contentious manner”, they insist there will be a high bar for enforcement.
However, the EHRC said it would be particularly challenging for employers to determine whether conduct constitutes harassment, especially with overheard conversations.
This difficulty becomes more complex when the conversation involves protected philosophical beliefs under the Equality Act 2010.
It’s not just freedom of expression that’s at risk.
The government’s impact assessment on Labour’s new legislation has concluded that it could impose costs on businesses to the tune of £5billion a year.
This figure reflects the direct financial burden of implementing the new employer duties aimed at preventing harassment by third parties.
However, many business leaders fear the thicket of administrative burdens, potential litigation, changes in business practices, and broader economic impacts like reduced hiring or increased prices will make the legislation far costlier than the assessed £5billion.
Indeed, past economic studies and business surveys have warned any reforms to employment rights legislation will largely be passed onto consumers through higher prices, workers earning lower wages and/or job losses.
Many business leaders fear the thicket of administrative burdens, potential litigation, changes in business practices, and broader economic impacts will drive up costs even further
PA
The Institute for Fiscal Studies estimates that about 80 per cent of extra costs are passed on in the form of lower wages than would otherwise have been paid.
According to the Government’s impact assessment, the costs will also be “proportionately higher for small and micro businesses due to the fixed costs of admin and compliance burdens”.
The employment rights bill also includes other significant measures affecting UK businesses.
These include guaranteed hours provisions for zero-hours contracts and allowing unfair dismissal claims from day one of employment.
The reforms have rattled business leaders, with CBI chairman Rupert Soames warning of reduced employment.
“I think not only will they not employ, I think they will let people go. I think there could be quite an ugly rush before some of these things come into force,” Soames told Radio 4.
No10 says ministers would continue to ‘engage’ with business on each specific reform in the new legislation, but insisted the government was committed to it, adding that measures would lead to “higher productivity for workers and higher returns for business” and that “many workers already deliver higher workers’ rights because it is in their own interests.”
EHRC chief John Kirkpatrick said: “The UK government has acknowledged the potential for unintended consequences in its economic analysis and summary impact assessment.”
An Office for Equality and Opportunity spokesman said: “Free speech is a cornerstone of British values but of course it is right that the Employment Rights Bill protects employees from workplace harassment, which is a serious issue.
“As with all cases of harassment under the Equality Act 2010, courts and tribunals will continue to be required to balance rights on the facts of a particular case, including the rights of freedom of expression.”