When The Equality Act 2010 was introduced, the legislation meant that an employer could be vicariously liable for harassment by a third party (such as a customer or a contractor).
The legislation stated that if (a) that third party had harassed an employee on at least two previous occasions; and (b) the employer had failed to take reasonably practicable steps to stop the harassment, that it would render the employer liable.
Many employers struggled with this piece of legislation believing that they had no control over the behaviour of people who were not their employees, however if they did not demonstrate they had taken steps to stop any such harassment their own employee could be awarded compensation in an employment tribunal.
However, this piece of legislation is now being repealed, with effect from 1st October 2013, under the newly made The Enterprise and Regulatory Reform Act 2013 (Commencement No. 3, Transitional Provisions and Savings) Order 2013. So, no more liability for third-party harassment for employers!
However employers should not take this quite so literally; as all employers will still have a duty of care towards their employees and should deal with any complaints appropriately, remembering at all times that harassment is about how the employee feels and the employer should not substitute their own views as to how they themselves would feel if subjected to any potential harassing behaviour. Employees could still potentially bring costly sex discrimination and constructive dismissal claims against their employer.