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Harassment – How the Employment Rights Act impacts construction contracts

September 2026

The upcoming changes introduced by the Employment Rights Act 2025 will strengthen employers’ obligations to prevent harassment in the workplace and expand the circumstances in which liability may arise for the actions of third parties. For businesses operating across complex projects, shared sites and multi-tier supply chains, these developments highlight the increasing importance of effective risk management, contractual arrangements and workforce governance measures to support a proactive approach to harassment prevention.

Key takeaways 

• Employers will soon be required to take all reasonable steps to prevent harassment and may become liable for harassment of employees by third parties.
• While these are predominantly employment law duties, they are particularly relevant to multi-party projects and shared sites, where employees work alongside other organisations.

• Contractual provisions can support a broader prevention and risk management strategy but need to also be aligned with other project documents and effectively managed throughout the supply chain.

• Contractual controls should be proportionate and practical, supported by appropriate risk assessments, policies, site rules, inductions and training, reporting routes, investigation procedures and consistent implementation and enforcement.

The Employment Rights Act 2025 (ERA 2025)

ERA 2025 will be implemented in stages during 2026 and 2027. While ERA 2025 does not directly regulate construction contracts or site operations, its practical significance for the sector lies in amendments to the Equality Act 2010 (EA 2010) and other employment legislation, currently expected to take effect from 30 October 2026.

In summary:

• The existing duty to prevent sexual harassment will be strengthened to a duty to take all reasonable steps.
• Employers may become liable for third-party harassment where they fail to take all reasonable steps to prevent it.
• Other third-party protections extend beyond sexual harassment to harassment related to protected characteristics.
• Whistleblowing and confidentiality reforms may strengthen employee protections.

The legal duty remains with the employer, however the steps reasonably available to it may include how commercial relationships are selected, managed and monitored, and how contractual and site-wide controls operate in practice.

Why is this relevant?

An earlier survey by Unite of over 6,000 female members across a range of sectors found that many had experienced sexual harassment at work, while travelling, or from a colleague. The survey highlighted concerns about workplace culture, with only 26% of respondents believing their employer had done enough to promote a zero-tolerance approach to sexual harassment, and 34% reporting that they did not believe such an approach existed in their workplace.[1] These findings were noted within industry press as also being particularly relevant to the construction sector.

Construction projects regularly bring together clients, consultants, contractors, subcontractors, suppliers and site visitors operating across layered supply chains and under different policies and reporting structures.

Harassment may potentially arise on site, during meetings, through digital communications or at work-related events, making clear responsibilities, reporting routes and preventative measures essential.

Can contractual provisions help? 

Suppliers may seek upstream provisions requiring their clients to acknowledge and support their commitment to employee wellbeing and harassment prevention. Such clauses could require co-operation, prevent conduct that causes or contributes to a breach, and include notification, mitigation and, where appropriate, termination rights. Whether these requirements can be agreed and are commercially acceptable will depend on the project context, the parties’ relationship and the legislative framework.

Depending on the project and the parties’ roles, contractual provisions downstream may also:

• Set clear behavioural standards and require compliance with legislation, site rules, policies and instructions;
• Require parties to communicate and manage those standards throughout their workforce and supply chain;
• Require prompt reporting, investigation and co-operation where concerns arise;
• Permit proportionate measures, e.g. the removal of specified personnel from a site or project;
• Flow obligations down to subcontractors and suppliers; and
• Provide appropriate contractual protections and remedies where obligations are breached, subject to suitable thresholds and procedural safeguards. For example, depending on the overall risk profile, contracts may include suspension or termination rights, or carefully drafted indemnities.

Properly drafted provisions can help to set expectations, support project management and demonstrate proactive risk management. They reinforce that inappropriate behaviour is a contractual, operational and commercial issue, not solely an HR matter.

Potential limitations and risks

Contractual provisions to manage this risk form only part of the solution. It will be important that employer can show that in addition to any such provisions, they otherwise took all reasonable steps in the circumstances.

Operational and commercial considerations will be key. For example, removing personnel can directly impact resourcing and programme delivery on live projects. Investigations may involve confidential information and competing employment obligations. Inconsistent enforcement may undermine the contractual framework and the employer’s ability to demonstrate a credible risk management and preventative strategy. This means that remedies should be proportionate, procedurally fair and aligned with the contract administration regime.

Additionally, where it is not possible to include contractual provisions an employer’s position in relation to harassment should be clearly signposted both upstream and downstream at the outset of any project and as necessary thereafter.

It is worth noting that the ERA 2025 extends beyond third-party harassment and forms part of a wider package of employment reforms outside the scope of this update. Additional changes affecting day one employment rights, unfair dismissal, low and zero-hours contracts, public sector outsourcing, TUPE and wider workforce governance may have other contractual and operational implications for construction businesses. The implementation timetable varies and further regulations are awaited.

Employers should also consider overseas assignments. Deployment on projects outside the UK does not necessarily remove the risk of UK employment law applying where there is a sufficiently strong connection between the employment relationship and the UK.

With the enhanced preventative duties and third-party harassment provisions approaching, construction businesses should review their contracts, supply chains, site procedures and governance arrangements. Most businesses will already have policies and procedures in place which are likely to need reviewing and updating to address these changes. The strongest protection will come from a coordinated approach combining contractual provisions with effective policies, training, reporting mechanisms and implementation.

Beale & Co advises clients across the construction, engineering and infrastructure sectors on contract drafting and negotiation, risk management and project-related issues. To discuss how these legal developments may impact your business, activities or projects and contracts, please contact Andrew Croft or Jonathan Booton.

Includes commentary from Kayleigh Rhodes 

[1] Zero Tolerance to Sexual Harassment – Know Your Rights, Unite, undated

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