Why employers can no longer ignore workplace culture.
Richard Reed Solicitors’ Associate Solicitor, Kat Moody, says employers are increasingly judged not only on written policies, but on workplace culture.
For employers, that means understanding discrimination, setting clear standards and acting early when conduct falls short.
Banter has long been part of office life -humour, teasing and informal chat- often treated as harmless. But left unchecked, it can become bullying, harassment and discrimination, exposing businesses to legal, financial and reputational risk.
Kat warns that workplace culture is defined by what managers tolerate, encourage or fail to challenge. “Leadership defines workplace culture by what it laughs at, and what it ignores,” she said.
Section 26 of the Equality Act 2010 defines harassment as “unwanted conduct related to a relevant protected characteristic, or conduct of a sexual nature, which has the purpose or effect of violating dignity or creating an intimidating, hostile, degrading, humiliating or offensive environment”.
That includes sexual harassment. Employers are expected to take preventative steps where conduct comes from colleagues or third parties.
Under the Equality Act 2010, conduct need not be intended to offend to amount to harassment. Tribunals focus on its effect and on whether it creates a degrading, hostile or offensive environment. Kat says, “It’s not about intention but perception and how the person being harassed feels”.
The Employment Rights Act 2025 is expected to strengthen protection from workplace harassment and increase employers’ responsibility to prevent it. Kat added, “As we have seen with the introduction of Worker Protection (Amendment of Equality Act 2010) Act 2023 that came into effect in October 2024, employers already need to take reasonable steps to prevent sexually harassment, as compensation can be increased by 25% at a tribunal, if an employer fails to do so.”
The issue matters even more as workplace communication extends beyond the office. “What begins as ‘just banter’ can ultimately expose a business to significant financial liability,” Kat added.
Tribunal decisions reinforce the point. In one case, a woman exposed to male colleagues watching pornography at work succeeded in a harassment claim after saying it created a degrading and hostile environment. The Employment Appeal Tribunal confirmed that delaying her complaint did not weaken her claim. Silence should not be seen as acceptance.
Other cases show how workplace culture can become evidence. Tribunals may consider whether nicknames, insults or jokes formed part of the workplace culture. Kat said: “A workplace culture of banter may explain behaviour, but it can become evidence of a toxic environment.”
Appearance-based comments remain high risk. Employers should be especially cautious about humour relating to appearance, age, race, gender, disability, sexuality, religion or identity.
Digital communication also expands the risk. WhatsApp groups, Teams chats, Slack messages, memes, GIFs and emojis are now regularly disclosed in investigations and Tribunal proceedings.
The consequences can be severe. Compensation may include injury to feelings, psychiatric injury, aggravated damages, future financial loss and loss of earnings.
Legal awards are only part of the impact. Employers may also face reputational damage, staff turnover, sickness absence, reduced morale, recruitment difficulties and management time spent on grievances.
As scrutiny of workplace culture grows, Kat believes employers should focus on prevention rather than reaction.
“Employers need to look beyond policies and focus on culture,” she said. “A joke, nickname or meme shared in seconds can lead to significant legal and reputational consequences.”
Take a deeper dive into the Employment Rights Act 2025 and its staged rollout across 2026 and 2027-one of the most significant overhauls of UK employment law in decades-in the latest episodes of Richard Reed’s Legally Sound Podcast, available now across all major platforms.
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