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When a customer harasses your employee, who pays the price?

When a customer harasses your employee, who pays the price?
When a customer harasses your employee, who pays the price?

Advice from an HR consultant in Camden, London on the new third-party harassment duty arriving in October 2026 and what your business needs to do before then.


If a customer behaves inappropriately towards one of your staff, you might assume that's a customer problem, not an employer problem.


From October 2026, the law will see it differently.


A new legal duty will make you directly liable if you haven't taken all reasonable steps to protect your employees from harassment by people outside your organisation.


That includes customers, clients, suppliers and members of the public.


Here's what you need to know and what to put in place before the deadline.


Two changes arriving at the same time


October 2026 brings two separate shifts in how harassment law applies to employers.


The first relates to sexual harassment. The existing requirement to take "reasonable steps" to prevent it is being raised to "all reasonable steps." If an employee brings a tribunal claim, you'll need to demonstrate that there was nothing more you could reasonably have done.


The second change is entirely new. It introduces a standalone duty holding employers liable when their staff are harassed by third parties. That duty covers all relevant protected characteristics, including age, disability, gender reassignment, race, religion or belief, sex and sexual orientation.


Both changes carry the same underlying expectation: if something happens and you can't show what you did to prevent it, a tribunal can hold your business accountable.


Why most existing policies won't be enough


The majority of harassment policies are written with internal behaviour in mind. They address how colleagues and managers should treat each other. That's important, but it doesn't cover the risk from people who don't work for you.


If your policy simply refers to "harassment" without specifying that it extends to customers, clients, contractors and members of the public, you have a gap. A tribunal looking at your documentation won't be able to tell whether you ever considered the possibility of third-party harassment at all.


Your internal grievance process is also likely designed around situations where the person responsible is another employee. When the person responsible is a customer standing in front of your staff member, a formal grievance meeting scheduled for the following week isn't an appropriate response.


What your policy needs to say


A properly drafted third-party harassment clause should cover five areas. I'll walk through each one.


1. Name the people it applies to

List who counts as a third party explicitly. Customers, clients, suppliers, contractors and members of the public should all be mentioned. Don't rely on generic language and assume it covers everyone.


2. Confirm equal seriousness

Your policy should make clear that harassment from someone outside the organisation is treated with the same weight as harassment from a colleague. It shouldn't be downgraded to a "customer relations" matter.


3. Provide a reporting route that works in real time

Staff need to know they can report an incident to a line manager or duty manager immediately. Waiting for a scheduled meeting isn't practical when the situation is happening on the shop floor, at a reception desk or during a client visit.


4. Commit to acting against the third party

Many policies focus entirely on what happens to the employee after an incident. The policy should also state that the business will take action against the person responsible. That could mean issuing a warning to a client, refusing to serve a customer or ending a contract with a supplier.


5. Make clear that staff don't have to tolerate it

Employees should never feel expected to continue serving or working with someone who has harassed them simply to preserve a commercial relationship. Your policy should say so explicitly.


As an example, a clause along these lines would cover the essentials: "This policy applies to harassment by anyone an employee encounters through their work, including customers, clients, suppliers, contractors and members of the public. Reports will be investigated with the same seriousness as internal matters. Action may include speaking to the individual, withdrawing service or ending a commercial relationship where appropriate."


Practical steps beyond the policy document


Having the right wording in your handbook is only part of the picture. Through our HR consultancy services in Camden, I regularly see businesses with decent policies that fall down on implementation.


Ask yourself the following questions:


  • Do your client-facing staff actually know how to report an incident involving a customer? Could they tell you right now who they'd speak to?

  • If an incident has already occurred, even one that felt minor at the time, do you have a written record of what happened and how you responded?

  • Have you carried out a risk assessment that specifically considers the third-party contact situations your employees face? Every business is different, and your assessment should reflect the reality of how your staff interact with external people.


If any past incidents feel unresolved or you're unsure whether your response at the time was adequate, it's worth reviewing that before the new duty takes effect. Getting advice now gives you time to address any weaknesses.


What "all reasonable steps" looks like in practice


You can't control how a customer or client behaves. No employer can. But you do have full control over your own policies, your response processes and the culture you set around acceptable behaviour.


For third-party situations specifically, demonstrating "all reasonable steps" means having:


  • A policy that directly addresses harassment from external parties

  • Staff who have been briefed on their right to report and on the process that follows

  • A separate escalation route for incidents involving non-employees

  • Evidence that you're willing to act against the third party, including ending commercial relationships when warranted

  • Documentation of any incidents and your response to them


Without these elements, your defence in a tribunal would rest on hope rather than evidence. That's a risk no business should be comfortable with.


Questions worth asking yourself before October


Before the new duty comes into force, take some time to consider where your business currently stands:


  • Does your harassment policy specifically mention customers, clients, suppliers and contractors, or does it only cover internal behaviour?

  • If a member of staff came to you today to report harassment by a customer, would you have a clear process to follow?

  • Are you confident that your managers understand the difference between a customer complaint and a harassment report?

  • Have you documented any previous incidents, even those that seemed resolved informally?


If you're uncertain about any of these, that's a sign there's work to do before October 2026.


Getting support with this


As an outsourced HR consultant in London, I can review your existing harassment policy and help you build a straightforward process for handling third-party incidents.


Whether you've already had a situation involving a customer or client, or you simply want to make sure your business is prepared before the deadline, I'm happy to have a conversation about where you stand.


Get in touch to book a discovery call and we can work through what needs to happen for your specific business.


Phone: 07897053026



 
 
 

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