What Every Small Business Owner Should Know About Harassment Laws

Last Updated: 

June 30, 2025

Running a small business comes with a unique set of responsibilities, especially when it comes to creating a safe, respectful, and legally compliant work environment. 

One area often underestimated by entrepreneurs is understanding and complying with workplace harassment laws. Even a single incident can lead to reputational damage, legal battles, or financial loss. 

This blog will provide a comprehensive guide to harassment laws that every small business owner should know, along with practical steps to foster a harassment-free workplace.

Key Takeaways On Understanding and Preventing Workplace Harassment

  1. Legal Framework: The Equality Act 2010 is the key legislation prohibiting harassment and discrimination based on nine protected characteristics: age, disability, gender reassignment, marriage/civil partnership, pregnancy/maternity, race, religion/belief, sex, and sexual orientation.
  2. Three Legal Definitions: Harassment is defined as unwanted conduct related to a protected characteristic, violating dignity or creating a hostile environment. It also includes unwanted sexual conduct or less favorable treatment due to rejection/submission to sexual conduct.
  3. Direct Discrimination: Treating someone less favourably because of a protected characteristic.
  4. Indirect Discrimination: Applying a provision, criterion or practice that puts people with a protected characteristic at a disadvantage, unless objectively justified.
  5. Discrimination by Association: Discrimination against someone because of their association with another person who has a protected characteristic.
  6. Discrimination by Perception: Discrimination against someone because you mistakenly perceive them to have a protected characteristic.
  7. Proactive Prevention: Businesses should implement clear anti-harassment policies, provide regular staff training, ensure quick and confidential complaint handling, and foster a culture of respect to prevent harassment.
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Running a small business comes with a unique set of responsibilities, especially when it comes to creating a safe, respectful, and legally compliant work environment. 

One area often underestimated by entrepreneurs is understanding and complying with workplace harassment laws. Even a single incident can lead to reputational damage, legal battles, or financial loss. 

This blog will provide a comprehensive guide to harassment laws that every small business owner should know, along with practical steps to foster a harassment-free workplace.

What is Workplace Harassment

Workplace harassment includes unwelcome conduct based on race, gender, religion, age, disability, or other protected characteristics. Harassment becomes illegal when:

Enduring the offensive conduct becomes a condition of continued employment, or

The conduct is severe or pervasive enough to create a hostile work environment.

In Canada, workplace harassment laws fall under both federal and provincial jurisdictions. Key legal frameworks include:

  • Canada Labour Code (for federally regulated workplaces)
  • Provincial occupational health and safety laws (e.g., Ontario's OHSA)
  • Canadian Human Rights Act
  • Understanding these legal foundations is essential for compliance and for fostering a culture of respect.

Types of Harassment Recognised by Law

Harassment can take many forms, and the law clearly outlines several types that employers should be aware of.

1. Sexual Harassment

Involves unwelcome sexual advances, inappropriate touching, sexually suggestive remarks, or requests for sexual favours. It can create an intimidating, hostile, or offensive work environment, regardless of whether the behaviour is verbal, non-verbal, or physical.

2. Discriminatory Harassment 

This occurs when individuals are targeted based on characteristics protected under human rights law, such as race, ethnicity, gender identity, religion, age, or disability. It includes offensive jokes, slurs, or exclusionary practices.

3. Psychological Harassment 

Encompasses behaviours such as bullying, intimidation, persistent criticism, spreading rumours, or undermining a person's confidence or credibility. This type of harassment can severely impact mental health and job performance.

4. Power-Based Harassment 

Happens when someone in a position of authority misuses their power to intimidate, coerce, or manipulate others. Examples include threatening job loss, assigning demeaning tasks, or creating fear to maintain control.

5. Online/Remote Harassment 

As remote work becomes more common, harassment through emails, messaging apps, video calls, or social platforms is rising. It includes cyberbullying, inappropriate messages, or exclusion from virtual meetings or projects.

Understanding these categories helps business owners and employees identify inappropriate conduct early and take steps to intervene before it escalates.

Workplace Harassment Training: Your First Line of Defence

Training employees on workplace harassment is not just a compliance requirement; it’s a proactive measure to shape a respectful, inclusive, and informed work culture. 

Effective workplace harassment training educates staff on recognising, preventing, and responding to various forms of harassment.

Comprehensive training should include:

1. Clear Definitions and Real-Life Examples: 

Help employees distinguish between appropriate and inappropriate behaviour using workplace scenarios.

2. Legal Responsibilities: 

Educate both employers and employees on their obligations under provincial and federal laws.

3. Incident Reporting Procedures: 

Outline step-by-step how to report harassment, what happens after a complaint, and the role of confidentiality.

4. Bystander Intervention: 

Empower employees to take action safely when they witness harassment.

5. Preventive Techniques: 

Encourage open dialogue, active listening, and other positive workplace behaviours to prevent harassment from occurring in the first place.

Many Canadian provinces, including Ontario, British Columbia, and Alberta, require employers to conduct mandatory harassment training as part of their occupational health and safety programs. 

Regular refresher courses ensure that new hires and existing staff stay informed and vigilant.

Your Legal Obligations as a Small Business Owner

Small business owners are not exempt from harassment laws. Key responsibilities include:

1. Creating a Written Policy: 

Most jurisdictions require a documented harassment policy that outlines your commitment to a safe workplace, reporting mechanisms, and investigation procedures.

2. Investigation of Complaints: 

Employers must promptly investigate all harassment claims, even if informal. Investigations should be impartial, timely, and documented.

3. Corrective Action: 

Take appropriate disciplinary or remedial action based on the outcome of investigations.

4. Non-Retaliation Guarantee: 

Ensure that employees who report harassment are protected from retaliation.

5. Record Keeping: 

Keep records of reports, investigations, and resolutions. This protects both the business and the employee.

Conclusion

Workplace harassment isn’t just a legal issue; it’s a business issue. As a small business owner, you have the opportunity to lead by example and build a respectful, inclusive workplace. 

Understanding your legal obligations and prioritising employee safety through clear policies, timely training, and open communication is essential. By investing in workplace harassment prevention today, you're building a stronger, more resilient business for tomorrow.

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