UK employers can be held vicariously liable for sexual harassment under The Equality Act, 2010. "Only if a UK employer can show it took 'all reasonable steps' to prevent harassment in the workplace by its employees, can it avoid liability. But an important point is that the employer can only rely on this defence by showing that it took such steps before the actual harassment took place. So taking a pro-active approach to prevent harassment occurring is very important, " says Robin Jeffcott, UK-based partner and co-chair, labour and employment practice at global law firm Reed Smith.

This framework also applies in the US - employers can be held vicariously liable for allowing sexual harassment to create a hostile work environment. "A hostile work environment is established where the employee is subject to unwelcome harassment based on her sex, the harassment is sufficiently severe or pervasive, a reasonable person under similar circumstances would find the conduct offensive, and where the employer knew or should have known of the harassment and failed to take prompt, effective action to stop the harassment. If the harassment is committed by a supervisor, the employer will be deemed vicariously liable. If, however, the harassing conduct is committed by a coworker, the employee must show that the employer was aware of the conduct.

"Where the employer's liability is based on harassment alone without any tangible employment action taken against the employee, the employer can defend itself by proving that it exercised reasonable care to prevent harassment and correct such behaviour but that the employee failed to take advantage of the employer's corrective measures, " explains Sara Begley, US based partner and co-chair, labour and employment practice at global law firm Reed Smith.

Reed Smith partners explain that employers can more readily avoid liability and provide their employees with a harassment free working environment by taking various steps: implementing and updating comprehensive anti-harassment policies, holding mandatory training regarding these policies and the implications of breaching them. Above all they need to take robust disciplinary action where the policy is breached to show that it is being enforced.