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For SMEs in Manchester, Altrincham and Cheshire, understanding this distinction isn't just good practice, it's now a legal requirement.
Picture this: your team is having their usual Monday morning catch-up. Someone makes a joke about a colleague's weekend plans. Everyone laughs. Or do they? That one person who smiled along might have actually felt uncomfortable, even humiliated. And just like that, what seemed like harmless office chat could become a legal liability for your business.
What Has Changed? New Legal Duties You Need to Know
Since 26 October 2024, the Worker Protection Act 2023 has placed a new proactive duty on all employers to take reasonable steps to prevent sexual harassment of their employees.
This represents a fundamental shift from reactive to preventative approaches.
If an employee succeeds in a sexual harassment claim and the tribunal finds you failed to take reasonable steps to prevent it, compensation can be increased by up to 25%. More importantly, the Equality and Human Rights Commission (EHRC) now has the power to investigate suspected breaches even without a specific harassment incident having occurred.
What does this mean for your business? You can no longer wait for a problem to arise before acting. The law expects you to anticipate scenarios where harassment might occur and implement preventative measures now.
Understanding Workplace Banter
The dictionary definition of banter describes it as 'a playful and friendly exchange of teasing remarks.' At its best, workplace banter strengthens team bonds, lifts moods and makes the working day more enjoyable.
But here's the critical question: is everyone actually enjoying it?
Banter should always be mutual, inclusive and respectful. When it becomes consistent, one-sided or demeaning, it crosses into bullying territory. The shift from playful teasing to harmful behaviour can be subtle but significant.
When Banter Becomes Harassment
Under Section 26 of the Equality Act 2010, harassment occurs when a person engages in unwanted conduct related to a protected characteristic (such as age, sex, race, disability or sexual orientation), or of a sexual nature, which has the purpose or effect of creating an intimidating, hostile, degrading, humiliating or offensive environment.
The crucial word here is "effect". A joke can still be harassment if its effect causes distress, even if the speaker didn't mean harm.
The nine protected characteristics under the Equality Act 2010 are:
Age
Sex
Disability
Gender reassignment
Marriage and civil partnership
Pregnancy and maternity
Race
Religion or belief
Sexual orientation
What About Bullying?
While there is no legal definition of bullying in the UK, ACAS describes it as unwanted behaviour that is either offensive, intimidating, malicious or insulting, or an abuse or misuse of power that undermines, humiliates or causes physical or emotional harm.
Unlike harassment, bullying doesn't have to relate to a protected characteristic. It can include:
Persistent unwarranted criticism
Verbal abuse or belittling comments
Deliberately excluding someone from work activities
Undermining someone's work or achievements
Spreading rumours
Assigning an unfair workload
Whilst bullying itself isn't specifically against the law, it can lead to constructive dismissal claims if the behaviour is so severe that an employee feels forced to resign.
The Reality Check: How Big Is This Problem?
The statistics should concern every employer. A 2024 CIPD report reveals that almost one in four workers have experienced some form of bullying or harassment in their career. More troubling still, whilst 81% of employers believe they are doing enough to prevent and manage bullying and harassment, only 36% of employees who experienced conflict feel it has been fully resolved.
This disconnect between employer perception and employee experience is where legal risk lives.
According to ONS data, over 20% of adults who reported sexual harassment for the year ending March 2024 said this took place at their place of work. The numbers are even higher for vulnerable groups, with research by Deloitte finding that 40% of disabled employees or those with chronic health conditions had experienced bullying.
Your Legal Responsibilities as an Employer
As an employer, you have several overlapping legal duties:
Duty of Care Under the Health and Safety at Work Act 1974, you must ensure the health, safety and welfare of your employees – which includes protection from bullying and harassment.
Prevention of Harassment Under the Equality Act 2010, you're liable for harassment related to protected characteristics unless you can show you took all reasonable steps to prevent it.
New Proactive Duty The Worker Protection Act 2023 introduces an anticipatory duty, meaning you need to take a proactive and preventative approach to protecting your employees from workplace sexual harassment. This includes considering risks from third parties such as customers, clients and suppliers.
What Are "Reasonable Steps"? Practical Actions You Must Take
The EHRC technical guidance sets out factors that may be relevant, including the size and resources of the employer, the nature of the working environment, the sector and the risks present in that workplace.
Here's what you should be implementing:
1. Create Robust Policies
Develop comprehensive bullying, harassment and sexual harassment policies that clearly define unacceptable behaviour and outline reporting procedures. Make sure these are easily accessible and regularly communicated to all staff.
2. Conduct Risk Assessments
Think about the potential risks in your organisation, including workforce demographics, attendance at events outside the usual working environment such as training or work-related social events, and interactions with third parties.
3. Implement Ongoing Training
One-off training sessions aren't enough. Education must be present at onboarding and repeated throughout the year. Training should cover:
The clear differences between banter, bullying and harassment
What the nine protected characteristics mean in practice
Why offensive, threatening and abusive language is always unacceptable
How words or phrases might have different meanings across cultures or languages
That even if someone uses a word to describe themselves, it may not be acceptable for others to use it
The importance of not laughing along if something makes you uncomfortable (it sends the wrong signal)
How to report concerns and what happens next
4. Lead by Example
Leadership is critical. Managers and senior leaders set the tone, and employees look to them to learn what acceptable behaviour is. Senior figures must demonstrate healthy behaviours consistently.
5. Create Safe Reporting Routes
Employees need to feel confident coming forward. This means:
Multiple ways to report (direct manager, HR, confidential hotline)
Clear promises of protection from victimisation
Transparent investigation processes
Regular communication about how reports are handled
6. Regular Monitoring and Review
The EHRC guidance recommends conducting risk assessments, engaging with staff through meetings, surveys and exit interviews, and evaluating the effectiveness of preventative measures.
When Someone Reports an Incident: Your Action Plan
Swift, appropriate action is essential. Here's your step-by-step process:
Step 1: Take It Seriously Every report deserves a proper response. Never dismiss concerns as "just banter" or "being too sensitive".
Step 2: Provide Immediate Support Ensure the person reporting feels heard and supported. Explain the process and timelines clearly.
Step 3: Start Your Investigation Follow your disciplinary procedure. Speak to all parties involved and any witnesses. Document everything thoroughly.
Step 4: Consider Interim Measures If necessary, make temporary arrangements to protect the complainant whilst you investigate (such as changing work patterns or teams).
Step 5: Reach a Fair Conclusion Base your decision on evidence. Ensure everyone understands the relevant policies and why the outcome has been reached.
Step 6: Take Appropriate Action This might range from additional training to formal disciplinary action, depending on the severity and findings.
Step 7: Follow Up Check in with all parties after the resolution. Consider whether any wider changes are needed to prevent similar issues.
The Coming Changes: What's Next?
The legal landscape continues to evolve. The Employment Rights Bill, expected to become law shortly, will introduce further responsibilities for employers from October 2026, including a tougher duty to take "all reasonable steps" – not just "reasonable steps" – to prevent sexual harassment.
New legislation that came into force in August 2025 prevents English higher education providers from entering into NDAs with staff in relation to bullying, harassment, sexual abuse or sexual harassment. Similar provisions in the Employment Rights Bill will extend this ban more widely.
SMEs Are Particularly Vulnerable
It's not just large organisations at risk. SMEs, where informal cultures can sometimes blur professional boundaries, are increasingly vulnerable. A lack of formal HR processes, training or escalation routes means issues can go unnoticed until they reach breaking point.
This is precisely where expert HR support becomes invaluable. For SMEs in Manchester, Altrincham and Cheshire managing these complex requirements alongside running your business can feel overwhelming.
What Makes P3 Different?
At P3 People Management, we've been helping businesses navigate workplace challenges for over 20 years. Our CIPD-qualified consultants understand the pressures facing SMEs in the North West, and we provide practical, affordable support when you need it.
Whether you need help creating policies, delivering training, conducting investigations or simply want a free consultation to understand where you stand, we're here. Our flexible pay-as-you-go and retainer services mean you get expert HR support without the cost of a full-time HR manager.
Your Next Steps
Don't wait for a problem to arise. The law now expects prevention, not just reaction. Here's what to do:
Review your current policies – Are they comprehensive and up to date with the 2024 changes?
Assess your risks – Where might harassment occur in your workplace?
Plan your training – When did your team last receive proper education on these issues?
Check your culture – Are your leaders modelling the right behaviours?
The bottom line? Creating a workplace where everyone feels respected and valued isn't just legally required – it's good for business. Teams that feel safe perform better, stay longer and contribute more.
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