Financial services firms have been urged to "take steps now" to protect workers and ensure compliance ahead of the introduction of sexual harassment prevention laws.
RSM UK said financial services are under scrutiny, following the Treasury committee's 'Sexism in the City' inquiry, as the “clock ticks” on the Worker Protection Act due to come in this year.
From October 25 2024, there will be a mandatory legal duty for all employers to take reasonable and proactive steps to prevent sexual harassment of their employees.
A breach of this could see employees claiming unlimited compensation at employment tribunals, according to RSM UK.
The committee's inquiry to see how the financial services industry has changed since 2018, when the previous Treasury committee highlighted a range of barriers faced by women in the sector, found a ‘shocking’ prevalence of sexual harassment and bullying.
RSM UK said this highlighted there was still "plenty of work to be done" within the industry.
Charlie Barnes, head of employment legal services at RSM UK, said: “Regulators have recognised sexual harassment in financial services needs tackling urgently, and the onus is on regulated firms to take action.
“Employers must be fully aware of their legal responsibilities and take steps now to protect their employees. Sexual harassment is extremely distressing for victims, and no business wants its employees to suffer in this way.”
To prepare for the new law, RSM UK has recommended firms to consider a number of things.
This includes undertaking a risk assessment of areas and practices of the organisation where employees may be exposed to risks of sexual harassment.
As well as fostering a culture where victims feel empowered to speak up, for example, providing a platform for them to report any incidents in confidence without fear of negative repercussions.
RSM UK has also recommended firms have a formal process in place to investigate any claims of sexual harassment made by employees and take appropriate action where necessary.
While also reviewing sexual misconduct complaints policies and procedures to ensure they are legally compliant, accessible and effective.
Additionally, firms should provide training to HR, line managers and all employees to ensure that signs of sexual harassment are recognised, and they understand how complaints should be handled.
RSM UK has also said firms should seek support from professional advisers to ensure the new legal obligations and regulators’ expectations are fully understood and complied with.
Barnes added: “For businesses, an accusation of sexual harassment can lead to costly compensation claims, reputational damage and recruitment issues. It’s in everyone’s best interests to eliminate it.”
alina.khan@ft.com
