Sexual Harassment: The True Cost of Getting it Wrong
Posted on November 28, 2025
Sexual harassment in the workplace isn’t just morally wrong, it’s also illegal, expensive, and entirely avoidable. Yet employers can still get it wrong.
The Legislation
The first is the Equality Act 2010. Under the Act, employees are legally protected against sexual harassment in certain places, including your workplace.
There’s also the Worker Protection Act 2023, an amendment of the Equality Act 2010. This came into effect in October 2024. Now, all employers have a legal duty to prevent sexual harassment of their workers.
To comply with the preventative duty, employers must take ‘reasonable steps’ to prevent sexual harassment of workers in the course of their employment. The duty requires that employers should anticipate scenarios when its workers may be subject to sexual harassment in the course of employment, and take action to prevent such harassment taking place.*
What is reasonable will vary from employer to employer. The law does not list specific steps an employer must take. To help decide, an employer will likely consider factors such as:
- The nature of the working environment
- The risks in that workplace
- The nature of any third-party contact
- They should also consider events outside of the workplace
- Training days
- Work-related social events
- Social media contact between staff
What happens if an employer doesn’t take reasonable steps to prevent sexual harassment?
The Equality and Human Rights Commission (EHRC) could take action against an employer. Also, if an employee makes a successful claim for sexual harassment and is awarded compensation, your employer may have to pay a higher rate of compensation.
Further, the ACAS Code of Practice on Disciplinary and Grievance Procedures compels employers to investigate grievances promptly, thoroughly, and impartially and to take appropriate action based on findings. Failure to follow the Code can result in tribunal awards being uplifted by up to 25%.
When sexual harassment is reported, employers need to take it seriously, investigate it appropriately and take appropriate action
A Real Life Example
This is a real life case study, to bring to life how easy it is to get it wrong.
A manager propositioned a team member at a social event. The employee, understandably horrified, raised a formal grievance to HR.
The employer initially did the right thing, the manager was removed immediately from the workplace and told not to have contact with the individual and they quickly investigated and the claim was upheld, alongside other claims of harassment and inappropriate behaviours.
So what happened?
The evidence from the investigation was robust and clear and it led to a disciplinary case and one where dismissal should have taken place. However, the manager was not dismissed. Perhaps they worried about the manager’s reaction or they feared operational disruption or reputational damage if the issue became publicly known. Whatever the reason, they chose a lesser sanction. The manager stayed. The employee subsequently left employment, having felt not listened to, and expected to work with the manager.
One Bad Decision
What followed was entirely predictable:
• The employee lodged an Employment Tribunal claim for sexual harassment, constructive dismissal, and discrimination
• Legal fees mounted to £120,000
• Total cost? Not only the time, effort, reputation of the Business, but the impact it had across the Business and it’s culture, questioning how caring their employer actually is. This has subsequently had a knock on effect with increased turnover and significant employee relations issues across different teams.
The Lessons Every Employer Should Learn
1. Sexual harassment isn’t a “difficult conversation” to be managed away. It’s gross misconduct and should be treated it as such.
2. HR exists to protect the business by doing the right thing. When they tell you to act, listen. Their guidance isn’t cautious it’s legally reputationally and financially sound.
3. The cost of inaction always exceeds the discomfort of decisive action.
4. Tribunals aren’t impressed by half-measures and the size of a Business does not impact this. Upholding a grievance then failing to act appropriately demonstrates an employer knew there was a problem and chose to ignore it. That’s indefensible.
The Bottom Line
This employer had everything they needed: a clear grievance process, professional HR guidance, and evidence. They still got it wrong because they ultimately lacked the courage to act.
Because sometimes, the most strategic decision is just doing the right thing.
Facing an Employee Relations Issue? Don’t Go It Alone
Whether you’re dealing with sexual harassment, a disciplinary matter, a grievance, or any other employee relations challengegetting it right the first time saves you money, protects your people, and keeps you legally compliant.
At SME HR Consultancy, we provide clear, practical, legally sound advice that helps you act with confidence. We don’t just tell you what the law says we tell you exactly what to do next.
Your first 30 minutes of advice is completely free. No obligation. No sales pitch. Just expert guidance when you need it most.
Don’t let one wrong decision cost you six figures. Get in touch today and let’s make sure you get it right.
Contact SME HR Consultancy. Because professional HR advice shouldn’t be a luxury.
- Call Us: +44 (0) 2382 518 004
- Email Us: info@smehrconsultancy.com
