The Employment Rights Act 2025: discrimination and harassment in the workplace

The Employment Rights Act 2025 is making wide ranging reforms to workers’ rights and employers’ duties. We highlight below the principal changes impacting discrimination and harassment in the workplace.

Sexual harassment

Since October 2024 employers have been under a duty to ‘take reasonable steps’ to prevent sexual harassment of employees in the course of their employment. Failure to comply risks enforcement action by the Equality and Human Rights Commission (EHRC) and/or a compensation uplift of up to 25% in the event of a successful sexual harassment claim.

From October 2026 this will be extended to a duty to ‘take all reasonable steps' to prevent sexual harassment. Existing case law on ‘all reasonable steps’ (in the context of the reasonable steps defence) highlights the particular importance of having effective policies (and making employees aware of them), providing adequate training and dealing appropriately with complaints. The Government is going to work with the EHRC on how best to support employers on this, and existing guidance may be updated.

From 2027 the UK government will be able to set out in regulations what will be regarded as reasonable steps. This may include, amongst other things, carrying out risk assessments, publishing action plans and policies, and steps relating to reporting mechanisms and managing complaints.

The whistleblowing rules were amended in April 2026 to explicitly provide that sexual harassment disclosures are protected disclosures (where the qualifying requirements are met, including that the worker reasonably believes that the disclosure is made in the public interest). Although such disclosures were arguably already protected (as a breach of a legal obligation) this change may lead to more awareness among potential whistleblowers.

Third-party harassment

Employer liability for third-party harassment (which was repealed in 2013) will be re-introduced from October 2026. Employers will become liable for third-party harassment of employees in the course of employment if they fail to take all reasonable steps to prevent it. This will apply to harassment related to age, disability, gender reassignment, race, religion or belief, sex or sexual orientation and to sexual harassment. A third-party is anyone other than the employer or its employees, such as customers or clients.

This will be more onerous than the previous third-party harassment provisions as there will be no requirement for the employee to have been harassed by a third party on at least two previous occasions, nor for the employer to have had knowledge of the harassment. However, the government has said that the expectations on employers in respect of preventing third-party harassment will be lower than the expectations in terms of preventing harassment of an employer's own employees.

Non-disclosure agreements

Any provision in an agreement between an employer and a worker, including a contract of employment, settlement agreement or standalone non-disclosure agreement (NDA), will be void to the extent that it prevents the worker from making an allegation or disclosure relating to ‘relevant harassment or discrimination’, or relating to the employer's response to the harassment or discrimination or the making of the allegation or disclosure. Relevant harassment or discrimination includes direct and indirect discrimination, discrimination arising from disability, failure to make reasonable adjustments and harassment. Victimisation is not specifically mentioned but is likely to be covered.

The new provisions will not apply to ‘excepted agreements’. In a recent consultation the government proposed that in order to be an excepted agreement:

The worker should receive independent advice, and expressly consent in writing to the NDA after receiving that advice;
There would be a 14-day cooling off period (which could be waived by the worker);
A written copy of the agreement would have to be provided to all parties;
The NDA could only cover relevant harassment or discrimination which has already taken place (i.e. not future acts)
The NDA should be time limited (either parties to agree on time limit or there would be a statutory maximum).

Even where there is a valid NDA, workers will be permitted to make disclosures to certain prescribed people (such as to law enforcement and victim support services). The detail on excepted agreements and permitted disclosures will be set out in regulations.

The restrictions are expected to apply from 2027. They are likely to have a major impact on settlement negotiations involving harassment or discrimination, as well as on the drafting of confidentiality clauses.

Other changes

From 2027 employers with 250+ employees who are under a duty to report their gender pay gap will need to:

Develop, publish and implement action plans to (i) reduce any gender pay gap; and (ii) support employees through the menopause - this is currently voluntary; and
Publish information about service providers they contract with for outsourced services.

Further consultation and regulations are expected which will set out the detail, including how often plans will need to be published (which cannot be more than every 12 months) and the penalties for non-compliance.

In addition, the government intends to bring forward an Equality (Race and Disability) Bill, which will introduce mandatory ethnicity and disability pay gap reporting for employers with 250+ employees, as well as new measures on equal pay.