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Risk in Context

Addressing Sexual Harassment and Discrimination in the Workplace

Posted by Eleni Petros 16 January 2018

recent survey from the Financial Times found that this is a worrying issue for financial institutions, revealing that the number of women working in asset management that have reported sexual harassment in the workplace has leapt to 32% this year, up from 25% in 2016. Meanwhile 72% of those surveyed say they have experience sexist behaviour in the workplace.

Are You Tackling Gender Discrimination?

Sexual harassment is one of the many issues around gender equality that businesses need to be proactively managing. According to the Mercer report When Women Thrive, Business Thrivethe changing legislative environment in the UK, including the gender pay gap reporting obligations, is an attempt to address issues around gender discrimination in the workplace.  However, there is still work to do to improve work environments, unconscious bias, and pay equity.

Potential implications for employers perceived not to embrace diversity include:

  • Employee discontent.
  • Diminished employee performance.
  • Damage to reputation.
  • Employment claims. 

In addition, organisations should consider how recent changes to the law could affect the number employment claims.  On 26 July 2017, the Supreme Court held that tribunal fees introduced by the Government in 2013 as a precondition for individuals being permitted to bring claims before the employment tribunal were unlawful.  As a result, it is likely that claims against businesses will increase as the tribunal system will again be free to access.  Organisations should therefore follow good employment practice and have comprehensive policies and procedures in place to mitigate the risk of employment claims being made, or, in the event of a claim, there is less risk of that claim being successful.

What Should You Consider in the Event of a Claim?

Most employment-related claims will be made against both the company and against the individuals involved. Traditional general liability policies will not provide cover to the company for employment practices liability claims.   Standard directors and officers liability policies will cover individual senior managers for claims made against them personally, but not the organisation itself. An employment practices liability policy will provide cover to both the organisation and individuals for sexual harassment claims.  These policies will usually provide cover for the costs of defending a claim and any resulting settlements, as well as fines and penalties.  

It remains to be seen whether recent allegations will now trigger a new wave of claims, but the issue appears to be widespread, and companies should take this into consideration. 

Eleni Petros