What other employers can learn from McDonald's legal commitment to eliminate sexual harassment from its restaurants

McDonald's has acknowledged that it has a serious problem with workplace sexual harassment. It has reached a legal agreement with the Equality and Human Rights Commission under which it has agreed to take steps to eliminate sexual harassment from its restaurants. 

It's not clear how many workers complained to McDonald's about sexual harassment but there must have been a significant amount of evidence for the ECHR to step in. Four years ago the union representing the company's employees, the Bakers, Food and Allied Workers Union (BFAWU), said it had received 1,000 complaints. McDonald's is a predominantly franchise business and it's unclear whether these complaints were made against multiple franchisees and/or McDonald's as the franchisor.

What type of legal agreement has McDonalds entered into?

The EHRC is the regulatory body responsible for enforcing the Equality Act 2010 and it has a range of powers available to it. It can enter into legally binding agreements (known as ‘section 23’ agreements because that is the section in the Equality Act 2006 that the power comes from). They are more cost effective than alternatives, such as launching a lengthy formal investigation or taking court action.

In this case McDonald's has agreed to:  

• communicate a zero tolerance approach to sexual harassment
• conduct an anonymous survey of workers about workplace safety
• enhance policies and procedures to prevent sexual harassment and improve responses to complaints
• deliver anti-harassment training for employees
• introduce specific training and materials to help managers identify areas of risk within their restaurants and take steps to prevent sexual harassment
• support the uptake of policy and training materials by franchisees within their independent organisations to support reporting of sexual harassment
• monitor progress towards a safe, respectful and inclusive working environment

Sainsbury's, Jaguar Land Rover and Network Rail reached similar agreements with the ECHR over recent years. 

Lessons for other employers

1. The law is changing

The government plans to beef up the law on sexual harassment at work. In 2021 it published its consultation response on sexual harassment in the workplace and indicated that it intended to make a number of changes to the law as it currently stands. It is has recently announced that it is supporting a private members bill to achieve that.

The Worker Protection (Amendment of Equality Act 2010) Bill will introduce a new duty on employers to take reasonable steps to prevent sexual harassment. Currently employers can escape liability for harassment if they can demonstrate that they’ve taken all reasonable steps to prevent it. This flips the law and imposes a duty on employers to prevent it occurring in the first place. 

Although employees won’t be able to bring a standalone claim that an employer has failed in this duty, if a tribunal concludes that an individual has been harassed, it can uplift their compensation by up to 25%

2. Third party harassment

The same Bill will reintroduce protection for employees who are harassed (it not limited to sexual harassment) by clients or customers. That used to the law but the government repealed it in October 2013 on the basis that the protection was 'unnecessary’. It's clearly now changed its mind (and not before time!) But the law isn’t going back to where it was which required the employer to know that an employee had been harassed on two other occasions before it became liable. 

This Bill will provide wider protection. There’s no requirement for an employee to have been harassed before and employers will be liable for the first act of harassment if they have failed to take all reasonable steps to prevent it. 

Employers will need to be pro-active and will, in most cases, have to do more than simply putting up a sign saying that abuse won’t be tolerated. The steps you have to take will vary depending on the sector in which you operate. Businesses that deal with general public will have to take more steps than those who don’t. 

3. New Code of Practice

The Equality and Human Rights Commission has been tasked with re-writing the Code of Practice on Harassment. The new Code is likely to raise the bar in defining what employers need to do to prevent workplace harassment in a post #metoo world. This will impact whether employers are able to defend claims from individuals who have been harassed by colleagues or managers. 

It is also likely to describe how employers can meet the new pro-active duty to prevent harassment and protect employees from third party harassment.

4. Franchisors should consider compulsory standards for their franchisees

We suspect many (if not most) of the complaints McDonald's received were against its franchisees. Although franchisors are usually reluctant to get too involved in the day to day running of their franchisees, if their brand is being damaged, they need to step in and agree the minimum standards they expect their franchisees to follow.  

5. Start to prepare

It's a good time to revisit your sexual harassment policy and the training you provide to staff about it. Even if it's fit for purpose (and we've seen plenty that aren't), you will need to regularly refresh the training to make sure that staff are aware of the standards you expect and that you will take action against anyone who breaches this. 

Our back to basics training modules give managers confidence to manage these sorts of issues. They help them to understand why policies and procedures matter, how they address legal issues and  help an organisation mitigate risk. We have a specific module on sexual harassment which will help you to prepare for the change in the law. Please get in touch with Jenny Arrowsmith if you'd like further information.

If you are a franchisor consider whether your own training and policies could be made accessible to franchisees and whether your franchise agreement should be amended to make this training and minimum standards compulsory. We can help with this. Catherine Palmer heads up our commercial franchise team and Charlotte Rees-John head of consumer goods and services regularly supports both franchisees and franchisors with the implementation of diversity and inclusion strategies as part of Irwin Mitchell's wider ESG support provided to clients.

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