What would you do if a supplier’s employee sexually harassed a member of your team?

You might report it, ask for a different person to attend your premises or reconsider the business relationship. But what happens if the supplier gives their employee a warning and expects business to continue as usual?

Changes to the law mean employers need to consider these situations carefully. Protecting your staff includes addressing risks from people who do not work for you.

A complaint involving two businesses

A situation we advised on a few years ago shows how complicated this can become. We have kept the details anonymous.

A supplier’s employee regularly visited a client business’s premises as part of their work.

The client business raised a complaint about the visiting employee. The allegations involved a sexual comment about a woman’s appearance and inappropriate touching. During the process, it also emerged that the client’s employee had previously made comments of a sexual nature about the visiting employee’s appearance.

The client business made its position clear: it did not want that individual returning to its premises.

The supplier had to consider the allegations, its employee’s position, its reputation and its relationship with the client business. It ultimately decided to dismiss the employee, with protecting its reputation and preserving the business relationship among its concerns.

Who decides what happens to the employee?

The client business could complain and request that the individual no longer attended its premises. However, it could not impose a disciplinary sanction on somebody employed by the supplier.

That decision belonged to the supplier, following an appropriate investigation and fair procedure. A customer’s demand does not, by itself, establish misconduct or make dismissal fair.

Had the supplier decided on a warning instead, that would not automatically have resolved the client business’s concerns. Whether either business could insist on continued performance, refuse access or end the arrangement would have depended on the contract and the wider circumstances.

What has changed?

Since 30th October 2026, employers in England, Wales and Scotland must not permit third parties to harass their employees in the course of their employment.

An employer permits harassment for these purposes where it happens and the employer has failed to take all reasonable steps to prevent it. Third parties can include customers, clients, contractors and people working for suppliers. The protection extends beyond sexual harassment to other harassment covered by the relevant Equality Act provisions.

Employers must also now take all reasonable steps to prevent sexual harassment of their employees, strengthening the preventative duty introduced in October 2024.

Our example predates these changes. In the same situation today, the client business could face liability if harassment occurred and it had failed to take all reasonable steps to prevent it.

This could include a first incident. Employers should assess foreseeable risks before receiving a complaint. Allowing someone to return after a complaint, without properly assessing and addressing the risk, could create further exposure.

Simply accepting the supplier’s disciplinary decision would not necessarily establish that the client business had fulfilled its own responsibilities.

What about the comments made by the client’s employee?

Her comments also needed consideration.

Previous sexual comments or a familiar relationship do not establish consent to further sexual comments or touching. Employers should assess whether the particular conduct was unwanted, rather than assuming that earlier exchanges made it acceptable.

Equally, inappropriate comments towards a male worker should be taken seriously. If the comments towards the visiting employee were unwanted and met the legal test for harassment, the supplier would also need to consider how to protect its employee from a third party.

Each person’s behaviour needs to be assessed on its own facts.

Your supplier and customer contracts may need attention

Harassment prevention is also a commercial issue.

Businesses should review whether their agreements support the action they may need to take. Acas specifically identifies reviewing contracts and terms and conditions as a possible step towards preventing third-party harassment.

Depending on the relationship, contractual provisions could address:

• Expected standards of behaviour towards each other’s staff.
• How complaints will be reported and investigated.
• Cooperation with investigations and preservation of relevant evidence.
• Arrangements for replacing an individual or restricting their access.
• Rights to suspend services or terminate the relationship in defined circumstances.

These provisions need careful drafting so both businesses understand when action can be taken, what procedure applies and whether notice is required.

They also need practical support. Staff must know how to report concerns, and managers must know what to do when a complaint involves a valuable customer or supplier.

Does every complaint mean dismissal or ending the relationship?

No. The appropriate response depends on the evidence, seriousness of the conduct, risks and available protective measures.

In some circumstances, a replacement individual, restricted access or revised working arrangements may adequately address the risk. In others, ending the relationship may be necessary.

The new rules do not prescribe a particular disciplinary outcome for another business’s employee. Each employer must consider its own responsibilities and take appropriate action.

What should employers do now?

Consider where your people encounter customers, suppliers, contractors and other outside contacts. For a care provider, that might include service users and their relatives. For a hospitality business, it could include guests; for a construction business, subcontractors and workers sharing a site.

Assess the risks, communicate expected standards and make sure reporting procedures lead to action. Check that your policies, manager training and commercial arrangements work together, and review whether the measures you take are effective.

A longstanding business relationship can be valuable. Employers also need arrangements that allow them to protect their people when something goes wrong.

Are your policies and managers ready to deal with third-party harassment?

Orchard Employment Law can help you review your approach, identify gaps and put practical measures in place. Through our ongoing HR and employment law support, we also help your managers respond when concerns arise from the first complaint through to investigation and any disciplinary action. Contact our team to discuss the support your business needs.