From Friday 30 October 2026, the Employment Rights Act 2025 will make employers liable for harassment by customers and other third parties unless they have taken all reasonable steps to prevent it, according to Magara Law. The change means racist, sexist or other discriminatory customer behaviour could lead to employment tribunal claims and compensation awards against businesses.
Scope of the new rules
The changes cover sexual harassment and harassment related to protected characteristics including race, religion or belief and disability, bringing a wide range of customer behaviour within employers' responsibilities.
Roy Magara, founder and solicitor advocate at Magara Law, said: "The reality is that employers will find themselves having to challenge customers they've been reluctant to confront in the past – even if those customers bring significant business through the door.
"If a member of staff reports harassment from a customer, even if they are loyal and well-paying, the employer must be prepared to take it up with them.
"That's not always going to be an easy conversation, especially when there's a commercial relationship to consider, but employers cannot simply ignore inappropriate behaviour because of who the customer is."
Defending tribunal claims
Employers who continue dealing with customers despite repeated complaints from staff could struggle to defend that decision if further harassment occurs. Even businesses that take precautions could face tribunal claims over whether they went far enough, with the measures expected of employers depending on the risks their staff face.
"Employers need to assess where and how staff interact with third parties, identify the risks and take practical steps to prevent harassment," Magara said. "My concern is that businesses will genuinely believe they've taken all reasonable steps, only to find themselves in an employment tribunal being told they haven't done enough."
"I don't think most employers are prepared, and I think a lot of them are going to struggle to prepare," he added. "I feel for employers because there are so many changes to keep up with. It's great news for workers, but businesses are being asked to meet an incredibly high standard, and I don't think we'll truly understand how that standard is applied until cases start reaching employment tribunals."
Guidance for retailers
The Association of Convenience Stores (ACS) said most convenience stores will already have in place reasonable steps to prevent harassment, such as CCTV, signage, and safety equipment, but has issued new guidance recommending retailers update policies and procedures.
